When Russia invaded Ukraine in February 2022, it lost access to many global markets, adding much of Europe. Countries like Germany, which for years relied on Russian fuel and oil, are now turning their backs and trying to get rid of any vestiges of Russian dependence. .
China has entered the breach. Still thirsty for new fuel and oil supplies, China temporarily informed Russia that it was interested in receiving Russian fuel and building a pipeline from Siberia to transport it.
However, lately this lifeline is more like a noose, at least for Russia. Beijing is taking a very competitive stance in relation to what will be known as the “Power of Siberia 2” pipeline, which was to carry a maximum annual capacity of 50,000,000 m³ of vegetable fuel from Russia to China.
China now demands to pay only the domestic value of the vegetable fuel, heavily subsidized by Russia, and does not dedicate itself to purchasing a very large amount of the fuel per year.
Meanwhile, Russia’s state-owned oil company Gazprom is losing money. Last year it posted a loss of $6. 9 billion, its first annual loss in 20 years. Perhaps in a sign of the difficulties of the negotiations, Gazprom CEO Alexei Miller, who had played a vital role in past Sino-Russian negotiations, did not bring Russian President Vladimir Putin into Beijing in May.
The fact that China is taking such a competitive stance in negotiations with Russia highlights the transformative force dynamic between the two countries following Russia’s invasion of Ukraine in 2022. Many Western European countries have reduced or ended their dependence on fuel and oil from Russia, Nordstream said. . Pipeline II was destroyed and much of Russia’s economic relations with the West were completely dissolved. Without this Western economic outlet, China has become more important to Russia’s economic interests.
However, China rarely passes up an opportunity to get an award. It is playing a difficult economic game with Russia, and Russia has little ammunition to retaliate. Whatever the final outcome of those negotiations, relations between China and Russia are changing. Vladimir Putin now knows this, despite his earlier claims that he has a “friendship without limits” with China. Simply put, China will not hesitate to help its northern neighbor. At the same time, Russia’s economic isolation is only getting worse and Vladimir Putin is likely to run out of time to deal with it.
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