Putin-Xi Pipeline Talks
CNBC reported Wednesday that Russian President Vladimir Putin and Chinese President Xi Jinping met in Beijing with the long-dormant Power of Siberia 2 gas pipeline firmly on the agenda. The meeting came as the ongoing U.S.-Iran war continues to upend global energy flows.
A Pipeline Years in the Making
The proposed Power of Siberia 2 project would stretch approximately 2,600 kilometers. It would pipe up to 50 billion cubic meters of natural gas annually from Russia’s Yamal fields through Mongolia into China. Moscow and Beijing signed a legally binding memorandum to advance the project in September 2025. Despite that milestone, pricing, financing structures, and a construction timeline have yet to be agreed upon.
The two sides remain far apart on price. Beijing reportedly wants terms matching Russia’s domestic rate of roughly $120-130 per 1,000 cubic meters. Moscow is pushing for figures closer to those applied under the existing Power of Siberia 1 agreement, which analysts say would more than double that price.
Also Read: What the U.S.-Iran War Means for Global Oil Supply
Background: Russia’s European Gas Collapse
Russia’s leverage in these talks is shaped by a stark energy reality. Its gas exports to Europe effectively collapsed following the 2022 invasion of Ukraine. China has since become Moscow’s most critical energy customer. Chinese imports of Russian oil surged 35% year over year in the first quarter of 2026, according to official customs figures. The existing Power of Siberia 1 pipeline already delivers roughly 38 billion cubic meters annually, with both nations agreeing to expand that capacity further.
Also Read: Russia’s Energy Pivot East Accelerates After Ukraine War
Iran War Adds Pressure, But China Holds Leverage
The broader context sharpening this negotiation is the U.S.-Iran conflict that began in late February. The effective closure of the Strait of Hormuz has cut off roughly half of China’s oil imports and nearly a third of its LNG supply. An overland pipeline would bypass those maritime vulnerabilities entirely.
Yet analysts caution that Beijing is unlikely to soften its pricing stance under pressure. China holds onshore crude stocks equivalent to around 92 days of refining needs, according to Kpler senior oil analyst Muyu Xu. Domestic gas output also rose 2.7% in the first four months of the year.
Kremlin spokesman Dmitry Peskov said Russia and China had reached a broad understanding on key parameters. He added that unspecified details still needed resolution, with no firm timeline given for construction.
Read Next: Iran War and the Strait of Hormuz: What It Means for Asian Energy Security
