Putin-Xi Pipeline Talks

CNBC reported Wednesday that Russian President Vladimir Putin and Chinese President Xi Jinping met in Beijing, with the long-delayed Power of Siberia 2 natural gas pipeline central to their agenda. The meeting came as the ongoing U.S.-Iran war continues to rattle global energy supply chains.

A Pipeline Years in the Making

The proposed Power of Siberia 2 project would span roughly 2,600 kilometers. It would carry up to 50 billion cubic meters of gas annually from Russia’s Yamal fields through Mongolia into China. Moscow and Beijing signed a legally binding memorandum to push the project forward in September 2025. Despite that milestone, pricing structures, financing arrangements, and a construction timeline remain unresolved. Kremlin spokesman Dmitry Peskov said the two sides had reached agreement on the pipeline’s main parameters. However, he cautioned that certain details still required resolution, with no firm schedule yet announced.

Also Read: What the Strait of Hormuz Closure Means for Global Oil Prices

Background: Why the Talks Stalled

The sticking point has long been price. China has reportedly pushed for gas rates matching Russia’s heavily subsidized domestic benchmark of around $120-130 per 1,000 cubic meters. Moscow has sought terms closer to the existing Power of Siberia 1 contract, which analysts estimate would more than double that figure. Russia’s gas exports to Europe collapsed following its 2022 invasion of Ukraine. That made securing a major new Asian customer strategically vital for Moscow. Meanwhile, China’s imports of Russian oil jumped 35% year-over-year in the first quarter of 2026, underscoring the deepening energy relationship.

Also Read: Russia’s Pivot East: How Moscow Rebuilt Its Energy Export Base

Iran War Adds Urgency, but Beijing Holds Leverage

The conflict between the United States and Iran has effectively shuttered the Strait of Hormuz. That closure has disrupted roughly half of China’s oil imports and nearly a third of its liquefied natural gas supply. An overland pipeline would bypass maritime chokepoints entirely, giving Beijing a compelling strategic reason to move faster. But analysts cautioned that urgency does not necessarily translate into concessions. China holds approximately 1.23 billion barrels of onshore crude inventory, enough to cover around 92 days of refining demand. Domestic gas output also rose nearly 3% in the first four months of 2026. Central Asian pipelines provide additional buffer supply beyond the Russian system.

At a joint press conference, Putin described discussions as “friendly, warm, and constructive.” Both leaders signed a joint statement reaffirming their comprehensive strategic partnership and called for a multipolar international order.

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