Russia Sanctions Talk, Hormuz LNG Tightness Weigh on Bakken

North Dakota’s oil and gas sector is tracking two global developments that could shape crude, natural gas and investment conditions: possible easing of U.S. sanctions on Russia and a tighter liquefied natural gas market driven by the Strait of Hormuz crisis, according to OilPrice.com.

Four days after Russia launched its all-out effort to subjugate Ukraine, the U.S. government and Western allies fired a broadside of financial sanctions aimed at punishing the Kremlin’s wallet, OilPrice.com reported. The Russian Central Bank was prominent, as was the Russian Direct Investment Fund, or RDIF, a multibillion-dollar sovereign wealth fund the U.S. Treasury called “a slush fund for President Vladimir Putin [that] is emblematic of Russia’s broader kleptocracy.”

After months of dormancy, U.S. negotiators have ramped up efforts to find a negotiated settlement to end Russia’s war on Ukraine and normalize relations between Washington and Moscow, according to OilPrice.com. Peace proposals vary, many tilt heavily in Russia’s favor, and they include lifting sanctions on RDIF, whose chief executive, Kirill Dmitriev, is the Kremlin’s point person for talks with the Americans.

Kremlin foreign policy adviser Yury Ushakov confirmed on Oct. 28 that the discussion is ongoing, according to OilPrice.com. “This conversation is going on,” Ushakov told Russian reporters. “It’s been going on for some time, though I don’t know what the result will be.”

Peter Harell, a former senior director on the White House National Security Council, warned that RDIF has served as “a vehicle for channeling investments into companies and sectors that are strategically important to Putin,” OilPrice.com reported. “We should all be clear-eyed about what unsanctioning RDIF would mean: it would mean prioritizing American investment in Kremlin-aligned projects over supporting Ukraine,” he said.

The RDIF was established in 2011 as Russian coffers were brimming with revenues from high global oil prices, and it says it has made 2.3 trillion rubles ($29 billion) in investments since inception, with about 80% from “partner funds.”

For Bakken operators and royalty owners, the sanctions debate matters because global oil markets are sensitive to Russian supply expectations and investment flows. Higher crude prices generally support North Dakota wellhead values and royalty payments, but the source does not specify a Bakken price impact.

Japan is expected to overtake China as the world’s largest LNG importer this year for the first time since 2022, as high LNG prices and sufficient storage in China limit purchases, according to OilPrice.com. ICIS estimates Japanese imports at 62 million metric tons and Chinese imports at 61 million tons; Kpler sees 63 million tons for Japan and 62 million tons for China.

China became the world’s biggest LNG importer in 2021, but COVID-related lockdowns pushed Japan to the top spot in 2022. China regained the top position in 2023, and that extended into 2025, OilPrice.com reported. This year, amid the Strait of Hormuz crisis, which halted LNG shipments out of Qatar and the United Arab Emirates, overall LNG import demand in Asia has plunged due to high spot prices in a suddenly tight market.

Chinese buyers acted early to build gas stockpiles amid the Iran war, helping Beijing stock enough inventories ahead of winter, according to OilPrice.com. As of the end of September, China’s underground gas storage was 80% full, Rystad Energy analyst Xiong Wei said. Lower demand for spot supply from China this winter could mean relief for other LNG customers in Asia and Europe, many of which have been struggling with high spot prices and intensified competition for supply that does not need to transit the Strait of Hormuz.

Japan reduced gas-fired generation in favor of coal this summer as LNG prices remained elevated, OilPrice.com reported. LNG prices in Asia surged to a four-year high as very few cargoes managed to exit the Strait of Hormuz while competition with Europe for winter supply intensified.

OilPrice.com also reported that Brent hit $117 as a tanker caught fire in the Strait of Hormuz, that Japan planned to tap a $7 billion government fund to subsidize gasoline prices, and that European gas topped 101 euros for the first time since 2022. For North Dakota, those signals point to global tightness that can influence crude and gas benchmarks used to price Bakken barrels and associated gas.