EU Payments for Russian Yamal LNG Hit €2.88 Billion in Q1 as War-Driven Price Spike Boosts Kremlin Arctic Revenues

The European Union paid an estimated €2.88 billion for liquefied natural gas (LNG) from Russia’s Yamal Arctic LNG project in the first quarter of 2026, as a surge in global gas prices triggered by conflict in the Middle East delivered a windfall to Moscow, according to a new analysis.

Data compiled by advocacy group Urgewald based on Kpler ship-tracking shows the EU imported 69 cargoes of Yamal LNG in the January–March period, accounting for roughly 97% of the project’s total exports, underlining Europe’s continued central role in sustaining Russia’s flagship Arctic gas operation.

The payments were significantly inflated by a sharp rise in benchmark gas prices in March, following the effective closure of the Strait of Hormuz disrupted global energy markets.

The primary benchmark for natural gas prices across Europe jumped from around €35 per megawatt hour in January and February to €52.87 in March, an increase of more than 50%.

That surge alone pushed estimated EU payments for March deliveries to €1.33 billion, nearly half the quarterly total.

Analysts say the price spike highlights how geopolitical tensions far beyond Europe can directly boost Russian Arctic energy revenues, even as Western governments seek to curb Moscow’s war financing.

Everything Russian produces

Urgewald’s data shows that Europe remained effectively the sole outlet for Yamal LNG in late winter, with all cargoes in February and March delivered to EU ports. Separate analysis by the Centre for High North Logistics (CHNL) earlier this week suggested Europe may have taken 100% of output during the Q1 period.

“Europe is not simply a buyer. It is the logistical backbone of the project,” the group said, noting that Yamal’s reliance on a limited fleet of ice-class vessels makes access to European terminals essential, particularly during winter months when Arctic shipping routes are constrained.

 Yamal LNG relies on just 14 specialised Arc7 ice-class tankers to maintain year-round exports, and these vessels require rapid turnaround at European ports to keep cargoes moving.

Despite EU efforts to reduce reliance on Russian energy since the start of the war in Ukraine, gas demand has begun rising again in recent years, and imports of Russian LNG have proven resilient.

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“In the fifth year of the war against Ukraine, the EU continues to keep Russia’s Arctic LNG sector afloat,” said Sebastian Rötters, sanctions campaigner at Urgewald.

“Yamal LNG depends on a small, specialised fleet and European services to keep exports flowing, yet Europe continues to provide both,” he said, adding that the recent crisis “must not be used as an excuse” for continued dependence.

Little effect

The data also suggests that EU measures introduced last year to curb Russian LNG flows have had limited impact. A ban on transshipment of Russian LNG via EU ports has not reduced volumes, but instead altered trade patterns.

Cargoes that were previously re-exported to Asia are now largely staying within Europe. Belgium’s Zeebrugge terminal, formerly a key transshipment hub, remained the single largest destination in the first quarter, receiving 17 cargoes.

France emerged as the largest overall importer, with 28 cargoes delivered to its Montoir and Dunkerque terminals, followed by volumes into Spain and the Netherlands.

Expanding buyer network

The persistence of strong European demand has helped offset Russia’s difficulty in expanding its LNG customer base elsewhere, particularly for sanctioned projects. But the Kremlin is trying to use the Hormuz crisis to also make inroads on that front. 

Moscow has been seeking to place cargoes from Arctic LNG 2 in new markets, including South Asia, traders say. Novatek, the project’s majority owner, has reportedly offered shipments at steep discounts up to 40 percent, Bloomberg reported.

Thus far China has been the only major importer willing to accept such cargoes via a shadow fleet network. It remains to be seen if buyers outside of China emerge as countries in Asia face LNG shortages following the Hormuz closure.

Arctic oil revenues also up

At the same time, Russia is benefiting from a parallel surge in oil revenues, including from the Arctic. Rising crude prices linked to the same geopolitical tensions have lifted the value of Moscow’s exports, with Urals crude climbing above $116 per barrel in recent weeks. The US also temporarily lifted sanctions on some Russian oil exports.

Tanker-tracking data shows Russian oil export revenues have risen to their highest levels since mid-2022, with weekly earnings exceeding $2 billion, despite ongoing disruptions from Ukrainian drone attacks on export infrastructure.

Taken together, the rebound in both gas and oil income underscores how global energy shocks continue to cushion Russia’s economy, even amid sanctions.

LNG funding Russian war

Urgewald estimates that the €2.88 billion paid by the EU for Yamal LNG in the first quarter equates to roughly €32 million per day.

“At roughly this level, the EU’s payments could fund around 1,000 drones per day,” Rötters said, referring to widely cited estimates of the cost of Iranian-designed Shahed-136 drones used by Russia in Ukraine.

“The uncomfortable truth is that this has helped keep Arctic LNG alive throughout the war,” he said.

“If the EU is serious about supporting Ukraine, it must cut gas demand and take stronger action against Russian gas now.”