Russia, China deepen oil and gas ties

Oil and gas are the center of gravity here — not just another side deal. Russia lost much of its old European gas market after 2022, and China is the one buyer big enough to absorb a meaningful share of that redirected flow. So when Xi Jinping met Vladimir Putin in Moscow on May 8, 2025, energy sat near the top of the agenda. The headline wasn’t a single blockbuster contract. It was something subtler — the two governments reaffirmed a long-term buildout of oil, pipeline gas, and LNG ties, while leaving the hardest negotiation unresolved. ### What actually changed? The immediate news was political. Xi and Putin signed a new joint statement deepening their strategic partnership during Xi’s Moscow visit, and the Kremlin used the talks to stress how central energy trade has become in the relationship. Putin said Russia had become China’s leading oil supplier in 2024 and ranked first in pipeline gas deliveries, with LNG and coal also high on the list. That matters because it shows the relationship is no longer mostly aspirational — the trade is already large and embedded. (bloomberg.com) ### Is this about one pipeline? Mostly, people mean Power of Siberia 2. That is the long-delayed gas pipeline Russia wants to build to send more West Siberian gas to China, partly replacing volumes that once went to Europe. The project came back onto the agenda around the Moscow talks, but the catch is that agenda status is not the same as a deal. Price, route, and timing have been sticking points for years, and those frictions were still there. (en.kremlin.ru) ### So what gas link is already working? Power of Siberia 1 is the live artery. Gazprom started sending gas through that route in 2019, and by late 2024 the line had reached its maximum contractual daily level earlier than planned after a Chinese request. Gazprom then said on May 30, 2025 that cumulative deliveries had reached 100 billion cubic meters, under a contract that runs until mid-2049. It also said a second route — the Far Eastern pipeline connection — is due to start in 2027. (bloomberg.com) ### What about oil? Oil is where the relationship already looks mature. China’s customs data showed Russian crude imports reached 108.5 million metric tons in 2024, about 2.17 million barrels a day, a record and enough to keep Russia ahead of Saudi Arabia. That tells you something important: even without a splashy new oil treaty this week, discounted Russian barrels are already deeply woven into China’s refining system. (gazprom.com) ### Where does LNG fit? LNG is the flexible piece. Russia and China have been pushing legal and financial arrangements around Yamal LNG and other Arctic projects, and Moscow has openly said Chinese companies are discussing participation in additional Russian LNG developments. Existing Chinese stakes in Yamal LNG and Arctic LNG 2 mean this is not a cold start. It is an effort to keep capital, buyers, and shipping relationships alive despite sanctions pressure. (marketscreener.com) ### Why hasn’t China just said yes to everything? Because Beijing does not need to rush. Russia needs replacement markets more urgently than China needs any single Russian project. China can buy pipeline gas from Central Asia, LNG from global suppliers, and crude from a wide mix of exporters. That gives Beijing leverage to press for better pricing and slower timelines. Basically, Moscow wants certainty; Beijing wants optionality. (tass.com) ### Does this change global energy flows? Yes — but more by direction than by shock. Russian hydrocarbons are moving east in larger volumes, while Europe relies more on LNG and non-Russian supply. If Power of Siberia 2 eventually gets done, that shift deepens. If it stays stalled, the current pattern still holds: strong oil trade, growing gas through existing lines, and LNG cooperation filling gaps where pipelines cannot. (bloomberg.com) ### Bottom line? Russia and China are deepening energy ties in a very practical way — more barrels, more gas, more infrastructure, more shared projects. But this is not a story about China handing Russia a blank check. It is a story about Russia turning east because it has to, and China taking the energy on terms it can afford to dictate. (bloomberg.com)