The Political and Commercial Dynamics of Russia’s Gas Export Strategy

This paper, jointly authored by James Henderson and Tatiana Mitrova, examines the emerging trends in Russia’s export strategy, identifying the key political drivers as well as the commercial factors that are influencing policy making.
Gas exports have historically provided a foundation of economic and political strength for Russia and a source of significant revenues for its leading gas company, Gazprom. However, lower commodity prices, the imposition of sanctions on Russia in light of the Ukraine crisis, lower gas demand in Europe, the EU’s desire to diversify away from Russian gas and increasing competition from new global LNG supply are presenting multiple challenges. A search for new markets in Asia, and especially China, has begun, but is currently not progressing as fast as Russia would have hoped, while domestically Gazprom’s position is being challenged by third parties who are keen to break the company’s export monopoly. ….