Russian President Vladimir Putin’s trip to China was more than a symbolic show of defiance toward the West — it marked the biggest economic project so far in Moscow’s long-promised “pivot to the east.”
On Tuesday, Moscow announced it had signed an agreement to build a major gas pipeline linking Western Siberia to northern China via eastern Mongolia. The project, known as Power of Siberia 2, could undermine EU sanctions against Russia and further strengthen China’s energy advantage.
After nearly two decades of faltering talks, Russian state-owned Gazprom said the two parties had inked a legally binding “memorandum of understanding.”
The deal lands as Brussels is weighing a 19th sanctions package against Russia over its three-and-a-half-year war of aggression in Ukraine. It also comes at a moment when concerns over EU-China competition are at an all-time high.
“This is a signal that the alliance between Russia and China is alive and doing well,” Anne-Sophie Corbeau, global research scholar at the Center on Global Energy Policy at Columbia University, told The Parliament.
For Moscow, the pipeline offers a lifeline, redirecting gas once bound for Europe after most of those markets slammed shut. For Beijing, it provides insurance against volatile Middle Eastern supply and secures privileged access to an ailing but resource-rich partner.
While the details of pricing, financing, and timelines remain murky, the deal underscores that Russia’s eastern pivot is no longer just posturing. Rather, it’s redrawing Eurasia’s energy map and weakening Western attempts to isolate Moscow.
Sanctions leverage slipping away?
Early hopes of a US-Russia thaw have fizzled. An Alaska summit held in mid-August where Donald Trump hosted Vladimir Putin with hopes of brokering a ceasefire yielded no breakthroughs, while Trump took to social media to accuse Chinese President Xi Jinping of conspiring with Putin and North Korean leader Kim Jong during high-level meetings in Beijing that also included India’s Prime Minister Narendra Modi.
“India's still buying Russian crude despite US secondary tariffs in order to try and stop purchases of crude,” Michal Meidan, Head of China Energy Research at the Oxford Institute for Energy Studies, told The Parliament. “So there's an element of sanctions defiance towards the EU and the US, saying, ‘We choose to stand with our Russian partners, even though the West disagrees.’”
Since invading Ukraine in 2022, Russia has leaned heavily on China as EU energy sanctions have taken their toll. Only hours following Putin’s Alaska meeting with Trump, Beijing received a gas shipment from Moscow’s Arctic LNG 2 project, a venture already under sweeping Biden-era sanctions. The cargo itself was a means to gauge Washington's appetite for enforcement.
“That was a big test from Russia and China to the US, to see if President Trump was going to sanction this cargo,” said Corbeau. “And so far, we haven't heard anything from the US.”
But for now, EU sanctions continue to bite. They currently cover roughly 90% of Russia’s oil exports to the EU, and a ban on Russian coal has cut about a quarter of Russian global exports—amounting to an estimated €8 billion yearly loss.
However, once fully operational, the Power of Siberia 2 pipeline would deliver some 50 billion cubic metres (bcm) of gas to China annually. In addition, exports via the existing Power of Siberia 1 pipeline, launched in 2019, will increase from 38 bcm to 44 bcm.
And while the EU has yet to sanction Power of Siberia 1 or Gazprom itself, the new pipeline is a clear show of defiance by Russia and China. “Morally or ideologically, they [the Chinese] are supporting the Russian economy, they're supporting the Russian energy sector, and therefore, I think as the European logic goes, fueling the Russian war machine,” said Meidan.
China holds the cards
Beyond the economics and alliances of Europe’s current conflict, the pipeline deal is a milestone in a longer game of energy and power.
Russia began courting China in the early 2000s, but the process was expedited after Russia’s annexation of Crimea from Ukraine in 2014 as relations with Europe soured. Spooked by the war between Israel and Iran this year, Beijing has been forced to reconsider the reliability of its oil and gas supply from the Middle East.
At the same time, “the Chinese did not want to be over-reliant or over-dependent on Russia for gas in the future,” said Meidan. “They have potentially put themselves in a position where roughly one-third of their gas imports come from Russia.”
Yet China has alternatives. Supplies from Central Asia, coupled with heavy investments in renewable energy dating back decades, put Beijing in a cushy position.
“They're still heavily reliant on crude, and 40% of their gas is imported,” Meidan said. “But the rapid electrification of Chinese end uses and the rapid build out of renewables actually gives them a huge hedge and quite a bit of flexibility that will over time help them reduce their vulnerability to oil and gas imports.”
Europe, meanwhile, finds itself squeezed from both sides. While the new pipeline chips away at the EU’s sanctions leverage over Moscow, the bloc is at the same time struggling to diversify away from dependence on China in its own energy transition.
Cheap Chinese solar panels, batteries and electric vehicles have accelerated Europe’s clean-tech rollout. But as China continues to tighten its grip on critical metals and increase its dominance of global refining and manufacturing, the EU’s dream of energy independence looks increasingly remote. Against this backdrop, some see Europe trading one dependency for another.
“The EU's position on China and energy is somewhat ambiguous, if not schizophrenic,” said Meiden. “Have we replaced reliance on Russian gas with reliance on China’s clean tech?”
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