On the doorstep of vast reserves, the Asia-Pacific will account for the majority of growth in terms of future energy demand. For Moscow, this is a welcome reorientation of economic growth and energy demand. Russia’s energy sphere accounts for more than a quarter of its gross domestic product and almost two-thirds of the Russian export market.
Moscow is planning for the Far East to account for 40 percent of Russia’s oil and gas exports. Russian liquefied natural gas exports to Asia are expected to rise from six percent to 30 percent by 2035, which is fitting given the future of global energy demand is also to be found in the Asia-Pacific.
An array of direct and indirect implications for Australia stem from Russian foreign energy strategy in Asia. Of course, the starkest is that Australia is set on a potential collision course when it comes to fuelling the Asia-Pacific. The Australian government should watch Russia’s Northern Sea Route (NSR) development closely, as a key component of Russia’s new energy strategy is the creation of a new global energy corridor for Asia. This has substantial implications for Australia. The Asia-Pacific currently relies on the Malacca Strait Russian Energy Strategy in the Asia-Pacific corridor to receive goods and most of its energy needs. This corridor is congested, poorly secured, and has long lead times—all of which factor into increasing transportation costs. These costs are carried over to the consumer.