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LNG is being put block

28 March 2023

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Kommersant newspaper about possible restrictions on the Russian LNG import to the EU countries.

Sergey Kondratiev does not rule out that Moscow has indeed managed to reorient itself towards Asian markets. However, there are still many issues to be resolved for stable supply, he says:

“If we are talking about Russian maritime exports, about 90% of the total volume is sent to Asian countries, primarily to China and India. Such a concentration was difficult to expect even in the middle of last year. Therefore, we can say that formally the reorientation has taken place, but it is very important to build up capacities and create our own tanker fleet, since until 2022 Russian companies mainly sold oil on an FOB basis, that is, in fact, in a Russian port, and then buyers exported this oil.

Now the question often arises that the raw material must be delivered directly to the buyers or that the cost will be significantly higher if it is delivered to the buyer's port than if it is sold FOB, and it is vital. In February-March, we see that Russia still uses ships that come to us from unfriendly countries, about 30-40% are tankers of European companies. From this point of view, building up the fleet is important, because in the event of tougher sanctions, we may be faced with the fact that we will have to look for this fleet on the open market. At the same time, you should have it with some margin".

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
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