Putin says Russia is close to a ‘serious’ gas and oil deal with China
The Power of Siberia 2 pipeline could redirect billions of cubic meters of Russian gas eastward, reshaping global energy flows and crypto-adjacent commodity markets.
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Add us on Google by Editorial Team May. 9, 2026Vladimir Putin announced that Russia is nearing what he called a “serious” gas and oil deal with China, a statement that carries significant weight given the two countries have been negotiating the Power of Siberia 2 pipeline for years. The deal, if finalized on the terms being discussed, would represent one of the largest energy agreements of the decade and fundamentally alter how fossil fuels flow across the Eurasian continent.
A legally binding agreement for the pipeline was reportedly signed on September 2, 2025, during a summit between Putin and Chinese President Xi Jinping. But here’s the thing: key details, including pricing and a confirmed timeline, are still pending confirmation from the Chinese side.
What the deal actually looks like
The Power of Siberia 2 pipeline would stretch roughly 2,600 kilometers from Russia’s Yamal Peninsula, cutting through Mongolia, and terminating in northern China. It’s designed to carry up to 50 billion cubic meters (bcm) of natural gas per year over a 30-year period, with initial deliveries targeted for 2030.
Post-2030, estimates suggest Russia could supply more than 100 bcm per year to China. That would account for over 20% of China’s projected gas demand in that year.
This isn’t Russia’s first massive pipeline deal with Beijing. Back in 2014, during the early stages of the Ukraine crisis, the two countries signed a $400 billion agreement over 30 years for the original Power of Siberia pipeline.
The new pipeline could divert approximately 30% of Russian gas exports that would otherwise have flowed to Europe. For Gazprom, Russia’s state-controlled energy giant, the revenue implications are substantial.
Why this matters beyond oil and gas
Western sanctions imposed on Russia following the invasion of Ukraine effectively severed much of Moscow’s access to European energy markets. Russia has been scrambling to find new buyers, and China is the obvious candidate, both geographically and strategically.
Russia and China have increasingly settled energy trades in yuan and rubles rather than US dollars, a trend that has accelerated since 2022.
What this means for investors
Russia has already experimented with digital asset-based commodity settlements, and China’s digital yuan pilot program is the most advanced CBDC project in the world.
The risk, of course, is that the deal falls apart or gets watered down. China has leverage here. Beijing knows Russia needs this deal more than China does, which is likely why pricing remains unresolved. If China drives too hard a bargain, Gazprom’s expected revenue boost could shrink considerably.
Europe is diversifying away from Russian gas toward US LNG, renewables, and Middle Eastern suppliers. Russia is betting its energy future on China.
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