Putin and Xi revive stalled gas pipeline talks amid Iran war energy disruption
Russian President Vladimir Putin met with Chinese leader Xi Jinping in Beijing on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline on the agenda as the Iran war disrupts energy supplies. The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia’s Yamal fields to China via Mongolia, but pricing, financing terms, and a delivery timeline remain unresolved. China reportedly sought pricing near Russia’s domestic rate of $120-130 per 1,000 cubic meters, while Moscow seeks terms closer to the existing Power of Siberia 1, which analysts estimate would more than double that figure. At a joint press conference, Putin said his country was ready to continue supplying China with energy and highlighted “big potential in joint renewable energy projects.” The Kremlin’s press secretary later said Russia and China had “reached an understanding on the project’s main parameters” but that “some nuances remain to be ironed out” with no clear timeframe. The U.S.-Iran war that started in late February has effectively closed the Strait of Hormuz, disrupting half of China’s oil imports and nearly a third of its LNG supply, creating fresh incentives for an overland pipeline. Analysts remain skeptical that the energy shock will alter Beijing’s negotiating calculus, noting China holds about 1.23 billion barrels of onshore crude inventory and has increased domestic gas output. Russia’s gas exports to Europe have collapsed since its 2022 invasion of Ukraine, with state-owned Gazprom seeing shipments plunge 44 percent last year to their lowest in decades.
What’s reported
Putin and Xi met in Beijing on Wednesday, with Power of Siberia 2 on the agenda.
The pipeline would span 2,600 kilometers and carry 50 billion cubic meters of gas annually from Russia’s Yamal fields to China via Mongolia.
A legally binding memorandum was signed in September 2025, but pricing, financing, and timeline remain unresolved.
China sought pricing near Russia’s domestic rate of $120-130 per 1,000 cubic meters; Moscow wants terms closer to Power of Siberia 1 (analysts estimate more than double).
China’s imports of Russian oil jumped 35 percent year over year in the first quarter.
The U.S.-Iran war, which started in late February, has effectively closed the Strait of Hormuz, disrupting half of China’s oil imports and nearly a third of its LNG supply.
China holds approximately 1.23 billion barrels of onshore crude inventory, sufficient for about 92 days of refining needs.
Russia’s gas exports to Europe have collapsed since its 2022 invasion of Ukraine; Gazprom shipments reportedly fell 44 percent last year.
Open questions
The exact pricing and financing terms for Power of Siberia 2.
Whether a final agreement will be reached and on what timeline.
How the Iran war energy disruption will affect Beijing’s negotiating position.
Key figures
Vladimir Putin, Russian President
Xi Jinping, Chinese leader
Yuri Ushakov, Kremlin foreign policy aide
Dmitry Peskov, Kremlin Press Secretary
Muyu Xu, Kpler senior oil analyst
Michael Feller, chief strategist at Geopolitical Strategy
Holly Ellyatt, CNBC reporter (credited)
Sources: CNBC
