Russia expects its natural gas sales to China to be less profitable than its exports heading westward, indicating the cost of its increasing reliance on the Asian country in energy trade after losing most of its European markets.

The Russian Ministry of Economy attached updated estimates to the draft budget submitted to the State Duma today, stating that gas export prices to China over the next three years are expected to be at least 27% lower compared to shipments directed to Turkey and a limited number of European countries.

For the year 2025, estimates indicate the price gap could reach 38%. Overall, these forecasts reflect that Moscow’s shift towards China has not yet compensated for the loss of most of its European markets since the start of its full-scale invasion of Ukraine in 2022.

Gazprom CEO Alexey Miller told Bloomberg that prices allocated to China are lower compared to Europe due to the proximity of the fields feeding the Asian route.

The Ministry of Economy estimates the average gas export price to China this year at about $248.7 per thousand cubic meters, compared to $401.9 for Western markets, excluding former Soviet Union countries.