Russia-China Gas Deal Will Have Global Ripple Effects: Analyst

The agreement between Russia and China this week to build a massive new gas pipeline is more than just another trade deal: It’s a geopolitical chess move that could leave China the biggest beneficiary of the Ukraine war, Russia with a new long-term customer, and US energy companies with excess LNG export capacity, Tim McDonnell wrote in an analysis for Semafor.

The deal isn’t finalized, as the issue of gas pricing remains unresolved — the key obstacle for years. (Photo: President of Russia)

When Russian President Vladimir Putin and US President Donald Trump met in Alaska last month, many expected Putin to push for reentry into Western energy markets closed to him since the 2022 invasion of Ukraine.

Instead, he signed on to build the Power of Siberia 2 pipeline, signaling greater confidence in Russia’s long-term relationship with China. As Columbia University researchers noted, the two nations “are moving to challenge US LNG dominance.”

The deal isn’t finalized, as the issue of gas pricing remains unresolved — the key obstacle for years. Moscow has resisted offering major discounts to foreign buyers, but may now have little choice if it wants China to replace Europe as its primary market.

China, meanwhile, has already suspended LNG imports from the US. A new Asia-bound pipeline would give Beijing enormous leverage in future LNG negotiations and expand regional access to piped gas — the last thing US exporters want.