Part
II – Europe and China Have an Energy Problem
March 7, 2026 | Sundance |
When President Donald Trump and
President Vladimir Putin met in Alaska on August 15, 2025, the focus of the
geopolitical world was on discussions surrounding Ukraine. Unfortunately, it
didn’t take long, merely a few hours, for both the U.S. and Russia to say that
no progress was made. However, also noted at the time was both the USA
and Russia saying sideline discussions took place surrounding the
possibility for a strategic relationship surrounding energy development.
What follows below is a review of
the current energy dynamic, specifically surrounding LNG, against the backdrop
of the Iran war with a hindsight review of that previous discussion between
Putin and Trump.
What most people are missing in their current analysis was something that
took place immediately following that Alaska summit six months ago.
Something that did not make any sense until now. {GO DEEP PART I HERE}
Three days after that summit meeting, on August 18, 2025, Russia announced they were restarting Russia’s Arctic-2 LNG production
facility. Russia would be more than doubling their capacity to
generate and store liquified natural gas (LNG).
It absolutely did not make sense that Russia would start producing even more
LNG considering the previously imposed western sanctions against them, and the
fact that Russia was already overproducing LNG. As noted by analysts at the time:
AUGUST 18, 2025 – Russia’s Arctic LNG 2 export
facility, which is sanctioned by the United States, is coming back to life
after a year of no activity and is looking for buyers in Asia.
[…] The U.S. and EU sanctions on Russia’s Arctic LNG 2, which was billed
as Russia’s flagship LNG project, have effectively frozen the start-up of the
export facility in the Gydan Peninsula.
[…] Last year, Russia started shipping LNG from its flagship Arctic LNG
2 project—but
not to customers. The shipments were made from the Arctic project to
floating storage units either in Russia or in European waters, as potential customers
were unwilling to buy the sanctioned LNG. {SOURCE}
In August of 2025, Russia was essentially producing more LNG than they could
sell into the available market. Russia was storing the overproduction
from Arctic-1 on floating storage units and slowly selling to countries that
did not align with the sanctions, specifically China and some Asian buyers.
Then suddenly, after the Trump summit, Russia decides to bring Arctic-2 online
and produce even more LNG. You can see how this did not make sense.
If they could not even sell all the Arctic-1 LNG output, then why would
Russia bring Arctic-2 LNG production online?
That was six months ago.
Suddenly, with the war in Iran being triggered, and with Qatar almost
immediately announcing they were shutting down all LNG production, there are
dozens of new markets for liquified natural gas. And that current LNG is now worth
50% more than it was when Russia inextricably decided to start producing and
storing it.
Apply some hindsight to this timeline. Did Russia know or discover
something in August of 2025 that the world would not discover until six months
later?
Russia’s behavior in increasing LNG production, then storing that LNG in
strategic venues, during a time when there was no reasonable incentive to
trigger an LNG output increase, would seem to answer that question in the
affirmative.
One thing is certain, all of that previously produced LNG is now worth
double what it was when Russia created it, and now the global market is
scrambling to get it.
Here is where it gets really interesting….
In October 2025, do you remember me asking why President Trump decided to
fly East, to go West to the ASEAN summit in Asia? It just didn’t make
sense.
Previously in 2017 when President Trump went to the ASEAN summit, he flew
West; Airforce One refueled in Guam. This time in 2025, a few weeks after
the meeting with President Putin in Alaska, President Trump flew East, to go
West.
Where did he refuel?
That’s correct. President Trump refueled in Qatar, and during the
‘unexpected’ stop he met, yet again, with Qatari leadership.
♦ In May 2025 President Trump traveled to Qatar and had numerous and lengthy
conversations, signing multiple strategic defense and trade deals. ♦ In
August 2025, President Trump meets with Vladimir Putin, who then begins ramping
up production of LNG. ♦ In October 2025, President Trump travels back to
Qatar for a curious and unexpected visit.
Less than 36 hours after President Trump began “Operation Epic Fury” Qatar
announces they are halting the production of LNG, and as a consequence the
price of LNG jumped and a massive supply shift in global trade was created.
The Financial Times – […] The global battle for gas is
underway, with Europe on the front lines. Since
Wednesday, March 4, at least four liquefied natural gas (LNG)
tankers – factory ships with large, refrigerated tanks used to transport LNG
over long distances – suddenly changed course. Initially headed for France,
Belgium or Spain from Africa and the United States, they rerouted for Asia,
according to data from the maritime analytics company Kpler. (read more)
MOSCOW, March 4 (Reuters) – Russia could halt gas
supplies to Europe right now amid a spike in
energy prices triggered by the Iran crisis, President Vladimir Putin warned on
Wednesday, linking the possible decision to the European Union wanting to ban
purchases of Russian gas and liquefied natural gas. (read more)
MOSCOW, March 6 (Reuters) – “Our companies are
considering opportunities, without waiting for further restrictions from
Europe, to conclude new long-term contracts with our
partners and redirect some of the gas from Europe to other countries,
including India, Thailand, the Philippines and the People’s Republic of
China,” Russian Deputy Prime Minister Alexander Novak said.
Next announcement:
[SOURCE]
Six months ago, following a summit in Alaska with President Trump, President
Vladimir Putin began producing and storing LNG at a scale and capacity that did
not make sense. Six months later, the now massive Russian inventory
is worth twice as much as it was, AND the number of global
buyers for the Russian LNG has exploded.
Meanwhile, “while China would suffer from oil outages,
a Middle East crisis with disproportionate LNG outages might benefit the PRC.
Natural gas accounts for a relatively small share of China’s primary energy
consumption, the country enjoys substantial domestic production, and it can tap
pipeline imports from Russia, Central Asia, and Myanmar. Significantly, many of
the PRC’s competitors or rivals—the European Union, Japan, South Korea, and
Taiwan—are substantially or even wholly reliant on LNG imports for their
natural gas consumption. Dutch TTF natural gas prices are up more than 50
percent against last Friday’s close, fueling concerns of an energy-induced
inflationary spike.”
Where is President Trump scheduled to go next?
WASHINGTON/BEIJING, March 3 (Reuters) – The U.S.
military campaign against Iran has put Chinese leader Xi Jinping on
the back foot ahead of an expected summit with U.S. President Donald
Trump, who for the second time in as many months has turned America’s military
against one of Beijing’s close partners.
Trump is set to arrive in Beijing at
the end of March following the U.S. capture of Venezuelan President
Nicolas Maduro in a risky Caracas raid in January and the U.S.-Israeli air war
that on Saturday killed
Iran’s Supreme Leader Ayatollah Ali Khamenei, the former leaders of
two countries that have been major oil suppliers for China.
[…] Xi now faces the awkward
prospect of feting Trump on the world stage or backing out of the proposed
March 31 to April 2 meeting. Beijing has yet to confirm the summit dates. (read more)
Huh, imagine that….
