Medium-term outlook: narrowing options

Arild Moe and Anna Korppoo

Chapter 6 in Climate, Hydrocarbons, Sanctions, 2026, pp 88-100 from Edward Elgar Publishing

Abstract: Continued sanctions will hold back economic development in the Arctic as an uncertain market for Russian hydrocarbons will limit investment in Russia's Arctic projects even from states not participating in sanctions. If sanctions are lifted, oil will flow into countries where the transport costs are lowest, notably Europe. Russian pipeline gas will still face limitations, as European countries are likely to avoid dependence on Russian gas. Russian LNG will have access to European as well as non-European markets, but could meet stiff competition. Even so, foreign investors may be reluctant to take on costly long-term projects in Russia as political uncertainty and potential new sanctions constitute an additional risk. With a downturn in the Russian economy and state finances, Arctic economic development, which is dependent on extensive state subsidies and investments in infrastructure, is vulnerable.

Keywords: China; Power of Siberia; Arctic LNG 2; Yamal LNG; Liquefied Natural Gas; Investments (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035355501
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