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 not just another trade deal.

Putin has moved forward with the Power of Siberia 2 pipeline, signaling confidence in a long-term partnership with China. (Photo: President of Russia)

It’s a geopolitical chess move that could leave China as the biggest beneficiary of the Ukraine war, Russia with a reliable new customer, and US energy companies with more LNG export terminals than they can fill, Tim McDonnell wrote in an analysis for Semafor.

When Russian President Vladimir Putin and US President Donald Trump met in Alaska last month, it appeared to be an opening for Moscow to return to Western energy markets.

Instead, Putin unveiled a different strategy: moving forward with the Power of Siberia 2 pipeline, signaling confidence in a long-term partnership with China. Researchers at Columbia University noted that Russia and China “are moving to challenge US LNG dominance.”

The deal, however, is not finalized.

The sticking point — gas pricing — has long delayed the agreement. Moscow has resisted offering steep discounts to foreign buyers, but may have little choice in China’s case as it seeks to replace lost European markets.

Beijing has already suspended US LNG imports for now, but a new Asia-bound pipeline would give it enormous leverage in future LNG negotiations while expanding regional access to piped gas — precisely what US exporters want to avoid.