The downgrade signals that Russia cannot redirect its lost European pipeline volumes quickly, which caps a potential source of global supply just as the EU phase-out removes Russian gas from the continent’s mix entirely. Slower Russian LNG growth tightens the outlook for seaborne gas at the margin, supporting competing exporters such as the US and Australia and keeping European buyers dependent on spot cargoes. Together with the earlier cut to oil output forecasts, the revisions point to a weaker Russian energy revenue base. That pressures the budget assumptions and limits Moscow’s ability to act as a swing supplier in either oil or gas.
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Plenty of energy in the news:
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Russia’s gas machine is still growing, just more slowly than Moscow hoped, as the EU’s exit leaves LNG as its main outlet and its European pipeline business at levels unseen since the 1970s.
Summary:
- Russia’s economy ministry has lowered its 2026 gas production and export forecasts in a draft document that will feed a budget update through 2029
- Gas output is now seen at around 683 bcm, about 5 bcm below the May projection but still above the roughly 663 bcm produced in 2025
- LNG exports are forecast to rise to around 35 million tons from about 30 million tons, still roughly 5 million tons below earlier expectations, with slower growth ahead
- The revisions reflect the Ukraine war fallout and the EU’s plan to stop all Russian gas purchases from next year
- Gas exports to Europe fell almost 45% last year to around 18 bcm, the lowest since the mid-1970s, against a peak of about 180 bcm a year
- The downgrade follows an earlier cut to Russia’s 2026 oil output forecast to a 17-year low
Russia’s economy ministry has lowered its forecasts for natural gas production and exports this year, as the European Union prepares to end its remaining purchases of Russian gas, according to a draft government document seen by Reuters. The revised figures will feed into an update of the federal budget through 2029.
Under the draft, Russian gas production is now expected at around 683 billion cubic metres this year, roughly 5 bcm below a projection made in May. That would still mark an increase on the approximately 663 bcm produced in 2025, meaning the downgrade trims expected growth rather than signalling an outright fall in output.
The picture for liquefied natural gas is similar. Seaborne LNG exports are forecast to rise to around 35 million tons this year from about 30 million tons in 2025, but that is roughly 5 million tons short of the earlier estimate. The document also shows LNG exports continuing to grow in the years ahead, though at a slower pace than previously projected.
The cuts reflect the breakdown in economic and political ties with the West since the war in Ukraine began, along with the EU’s plan to halt all Russian gas purchases from next year. The gas downgrade follows an earlier revision this month that lowered Russia’s 2026 oil output forecast to a 17-year low and reduced the outlook for fuel exports this year and next, changes also linked to the war.
The scale of Russia’s lost European market is stark. Gas exports to Europe fell by almost 45% last year to around 18 bcm, the weakest level since the mid-1970s, after the Ukrainian transit route closed. At their peak in 2018 and 2019, Russian pipeline flows to Europe ran at about 180 bcm a year, roughly ten times last year’s volume.
Moscow continues to argue that Europe is harming itself. The Kremlin said this month that European buyers were paying more for gas on the spot market rather than taking cheaper Russian supply, and Russia says it stands ready to resume deliveries, including through the Nord Stream pipelines. One leg of that system remains intact after the September 2022 blasts that disabled the network.
For now, the revised forecasts suggest Moscow expects little near-term recovery in its European gas business. With the EU phase-out approaching, the pace of LNG growth and any reopening of pipeline routes will be the key tests of how much export capacity Russia can redirect, and how much revenue its updated budget can count on.
This article was written by Eamonn Sheridan at investinglive.com.