Putin-Xi Pipeline Talks
Russian President Vladimir Putin arrived in Beijing on Wednesday for high-stakes talks with Chinese leader Xi Jinping, with the long-stalled Power of Siberia 2 gas pipeline at the center of the agenda, CNBC reported.
The meeting comes as a U.S.-Iran war, which erupted in late February, has effectively shut the Strait of Hormuz. That closure has disrupted roughly half of China’s oil imports and nearly a third of its LNG supply.
A Pipeline Stalled by a Pricing Gap
The proposed Power of Siberia 2 pipeline would stretch 2,600 kilometers, connecting Russia’s Yamal gas fields to China through Mongolia. At full capacity, it would deliver 50 billion cubic meters of gas annually. Moscow and Beijing signed a legally binding memorandum in September 2025 to advance the project, but the two sides have not resolved pricing, financing, or a construction timeline. China has pushed for pricing aligned with Russia’s domestic rate of roughly $120-$130 per 1,000 cubic meters. Moscow is seeking rates closer to those governing the existing Power of Siberia 1 link, which analysts estimate would more than double that figure. Kremlin foreign policy aide Yuri Ushakov said Tuesday the pipeline “will be discussed in great detail between the leaders.”
Background: Russia’s Pivot East After Europe’s Exit
Russia’s gas relationship with Europe essentially collapsed following its 2022 invasion of Ukraine. State energy giant Gazprom saw European shipments reportedly fall 44% last year to their lowest point in decades. That left China as Moscow’s most critical energy customer. Chinese imports of Russian oil jumped 35% year-over-year in the first quarter of this year alone, according to official customs data. The existing Power of Siberia 1 system currently delivers roughly 38 billion cubic meters of gas annually, and both governments have already agreed to expand its capacity.
Also Read: Hormuz Closure Pushes Asian LNG Spot Prices to Multi-Year Highs
Beijing Holds Leverage, Analysts Say
Despite the energy pressure created by the Hormuz disruption, analysts are skeptical the crisis dramatically strengthens Moscow’s hand. China holds approximately 1.23 billion barrels of onshore crude inventory, covering 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, with Central Asian pipelines providing additional cushion.
Geopolitical Strategy’s chief strategist Michael Feller warned of deeper structural consequences if a deal is struck. A signed agreement would formalize a co-dependency that makes the Sino-Russian relationship harder for the rest of the world to untangle, he said. For Moscow, a pipeline of this scale concentrates export revenue on a single buyer. For Beijing, it trades one vulnerability at sea for another on land.
Read Next: Iran War Explained: What the Strait of Hormuz Closure Means for Global Oil
