China Profits from Re-exporting Russian Gas

China has started to resell liquefied natural gas (LNG) in record volumes and profit from the price surge, Reuters reports. Following the onset of the war between the U.S. and Israel with Iran, LNG prices in Asia have risen by approximately 85%. A key reason for this has been the disruption of supplies through the Strait of Hormuz, which accounts for about 20% of global LNG flows.

LNG imports to China have also sharply decreased: in March, they amounted to 3.68 million tons — the lowest level since April 2018. However, China is receiving gas from Russia and through its own production. "Pipeline supplies and domestic production remain stable," notes Kpler analyst Nelson Syun. In March, China resold up to 10 batches of LNG — the highest monthly figure on record (according to ICIS, Kpler, and Vortexa). Since the beginning of the year, China has already resold 1.31 million tons of LNG (19 batches) compared to 0.82 million tons for the entire year of 2025. The main destinations are South Korea (10 batches), Thailand (5), as well as Japan, India, and the Philippines.

China profits from the arbitrage between its cheap long-term contracts with Russia and the expensive spot market. Russian pipeline gas costs China about $250 per 1,000 cubic meters. At the same time, spot prices in Asia have risen to $830 per 1,000 cubic meters. China's margin on resale can exceed the purchase price by three times. Each standard LNG shipment (about 70 million cubic meters) can yield up to $40 million in profit.

China has also been purchasing Russian LNG at a discount. "Novatek" has been providing Chinese buyers with a discount of 30–40% on fuel from the "Arctic LNG-2" project since at least the end of summer. Theoretically, this could also increase profits upon potential resale.

The increase in resales is linked to a decline in domestic demand in China. "Against the backdrop of weak domestic demand, it is more profitable for buyers to resell batches abroad," says ICIS analyst Wang Yuanda. Almost half of the March resales were accounted for by the Binhai terminal of CNOOC in Jiangsu province.