Putin and Xi Meet in Beijing Over Power of Siberia 2 Pipeline Deal

Russian President Vladimir Putin arrived in Beijing Wednesday for talks with Chinese President Xi Jinping, with the long-delayed Power of Siberia 2 gas pipeline dominating the agenda, CNBC reported.

The meeting comes as the ongoing US-Iran war disrupts global energy flows, adding fresh urgency to negotiations that have dragged on for years.

A Pipeline Years in the Making

The proposed Power of Siberia 2 would stretch roughly 2,600 kilometers. It would transport up to 50 billion cubic meters of Russian gas annually from the Yamal fields through Mongolia into China. Moscow and Beijing signed a legally binding memorandum in September 2025 to advance the project. Yet three critical issues remain unresolved: price, financing terms, and a construction timeline.

Kremlin foreign policy aide Yuri Ushakov told reporters Tuesday that leaders would discuss the pipeline “in great detail.” The gap between the two sides on pricing remains wide. Beijing is pushing for rates near Russia’s domestic price of around $120-130 per 1,000 cubic meters. Moscow wants terms closer to the existing Power of Siberia 1 agreement, which analysts estimate would more than double that figure.

Iran War Adds Pressure to Beijing’s Energy Strategy

The US-Iran conflict, which began in late February, has effectively shut down the Strait of Hormuz. CNBC noted the closure has disrupted roughly half of China’s oil imports and nearly a third of its LNG supply. An overland pipeline bypassing maritime chokepoints would appear to suit Beijing’s interests.

Analysts are less convinced the crisis changes China’s negotiating position. China holds onshore crude reserves sufficient for approximately 92 days of refining needs, according to Kpler senior oil analyst Muyu Xu. Domestic gas production also grew 2.7% in the first four months of 2026, and Central Asian pipelines provide additional supply buffers.

Background: Russia’s European Exit and China’s Growing Role

Russia’s gas exports to Europe collapsed following its 2022 invasion of Ukraine. Gazprom shipments reportedly fell 44% last year, reaching their lowest levels in decades. That left Moscow increasingly dependent on China as its primary energy customer. Chinese imports of Russian oil already jumped 35% year-over-year in the first quarter of 2026, per official customs data.

Strategic Stakes Run Deep on Both Sides

Michael Feller, chief strategist at Geopolitical Strategy, told CNBC the pipeline would create mutual dependency rather than eliminate risk. Russia would become dangerously reliant on a single buyer. China would swap Hormuz vulnerability for exposure to Russian-controlled infrastructure. Feller said any deal would signal “a decision that co-dependency is safer than the alternative” and would make the Sino-Russian relationship structurally harder to separate.

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