Russia’s natural gas production fell 3.2% in the first half of 2025, reaching 334.8?billion cubic meters (bcm), as higher exports to China and increased domestic demand failed to offset the collapse of pipeline flows to Europe, Bloomberg reported on Wednesday. The drop, confirmed by federal statistics and Bloomberg analysis, reflects the structural impact of Ukraine’s January decision to terminate its gas transit deal with Moscow.
That route had accounted for over 15?bcm in 2024, making it the last significant corridor to the EU following earlier shutdowns and sabotage. With the Ukrainian corridor gone, Russia is now relying on limited capacity via TurkStream, which has seen rising shipments to Slovakia but remains insufficient to restore previous export levels, Bloomberg reported.
China, now Russia’s top gas customer, has boosted intake via the Power of Siberia pipeline by more than 20% this year, occasionally surpassing contractual minimums. Yet the pipeline’s 38?bcm annual capacity is nearly maxed out, and no additional volumes are expected until a new Far East route comes online in 2027.
Meanwhile, domestic consumption has increased, driven by a cold spring and the government’s continued expansion of household and industrial gas access. Gazprom has also secured long-term deals with Central Asian nations, but these new contracts offer modest volume relief compared to the scale of lost European demand, as per Bloomberg.
Efforts to deepen ties with China face headwinds as talks over the Power of Siberia 2 pipeline remain stalled. Western sanctions continue to squeeze Russia’s energy revenues, with the EU’s July enforcement of a $47.60 per barrel price cap further constraining Moscow’s ability to monetize its oil exports—compounding financial pressure across the energy sector.
At this point, Russia’s gas sector is poised to remain in contraction until new infrastructure or export markets come online.
By Charles Kennedy for Oilprice.com
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