Moscow pares gas output and LNG export forecasts ahead of EU halt on purchases

The cut implies Moscow cannot quickly reroute the pipeline volumes it has lost in Europe, putting a ceiling on a possible source of global supply at the very moment the EU phase-out removes Russian gas from the continent's energy mix entirely. The slower expansion of Russian LNG tightens the seaborne gas picture at the margin, benefiting rival exporters like the US and Australia while keeping European customers reliant on spot cargoes. Combined with the earlier reduction in oil output forecasts, these changes point to a weaker base for Russian energy revenues. That puts pressure on budget planning and constrains Moscow's ability to act as a swing supplier in oil or gas.

Russia's gas sector continues to expand, though not at the pace Moscow had hoped, with LNG becoming the main sales outlet as the EU departs and pipeline sales to Europe at lows not seen since the 1970s.

Summary:

• The economy ministry's draft document lowers its 2026 gas production and export forecasts and will inform a budget update running through 2029.
• Output is projected at roughly 683 bcm, about 5 bcm less than the May estimate but still higher than the roughly 663 bcm produced in 2025.
• LNG shipments are set to climb to around 35 million tons from about 30 million tons, still nearly 5 million tons under the previous projection, and subsequent growth is seen slowing.
• The cuts stem from the fallout of the war in Ukraine and the EU's intention to end Russian gas purchases as of next year.
• European gas exports dropped nearly 45% last year to about 18 bcm, the lowest since the mid-1970s, versus a peak near 180 bcm a year.
• This reduction follows a separate revision this month that cut Russia's 2026 oil output forecast to a 17-year low.

According to a draft government document seen by Reuters, the economy ministry has cut its projections for natural gas output and exports in 2026 as the EU gets ready to halt its remaining purchases of Russian gas. The updated numbers are to be used in a federal budget revision extending through 2029.

The draft puts Russian gas production at roughly 683 billion cubic metres for this year, about 5 bcm under the May projection. That remains an improvement on the roughly 663 bcm produced in 2025, so the reduction narrows anticipated growth instead of pointing to an outright drop.

Liquefied natural gas follows a similar pattern. Seaborne LNG shipments are expected to reach about 35 million tons this year, compared with roughly 30 million tons in 2025, still about 5 million tons below the earlier forecast. Further growth in LNG exports is projected in later years, but at a more moderate rate than previously anticipated.

The reductions stem from the collapse of economic and political relations with the West after the start of the Ukraine war, and from the EU's plan to end all Russian gas buying as of next year. The gas revision follows an earlier adjustment this month that took Russia's 2026 oil output forecast down to a 17-year low. The same move also cut fuel export expectations for this year and next, and was tied to the war.

How much of the European market Russia has lost is striking. After the Ukrainian transit route shut, shipments to Europe dropped nearly 45% last year to approximately 18 bcm, the lowest reading since the mid-1970s. In the peak years of 2018 and 2019, pipeline deliveries to Europe were about 180 bcm annually, around ten times the volume recorded last year.

Moscow still maintains that Europe is hurting itself. This month the Kremlin said European customers were paying higher spot prices for gas rather than taking cheaper Russian supply. Russia also says it is ready to resume deliveries, including via the Nord Stream pipelines. One leg of that system survived intact after the September 2022 explosions disabled the network.

For the moment, the updated projections indicate Moscow sees little prospect of a quick rebound in its European gas sales. As the EU phase-out nears, LNG expansion and the possible revival of pipeline routes will determine how much Russian export capacity can be shifted elsewhere, and how much income the revised budget can rely on.