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Matt's Market Insights

 

China and Russia just signed a huge natural gas deal that has been in the works for nearly a decade. The 30-year agreement will provide China with over $400 billion dollars worth of natural gas. This deal comes at an interesting time considering the situation in Ukraine. As events unfold, the European Union has been trying to find alternative sources of gas in anticipation of the Ukraine crisis causing supply disruptions. Nearly a third of Europe's natural gas comes from Russia, with about half of that traveling through Ukraine.

 

By signing this agreement and expanding their gas market, Russia is protecting its interests and reducing economic risk. According to Capital Economics, gas exports in Russia account for roughly 10% of total exports and 6% of government revenues. The prospect of energy related sanctions, which the EU has been reluctant to impose so far due to their heavy reliance, has been a concern ... Log in or subscribe to continue reading.


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