Putin’s visit to China results in multi-billion losses for Gazprom
Photo: Gazprom shares plunge after Putin’s visit to China (Getty Images)
Shares of the Russian gas monopoly Gazprom fell sharply after the conclusion of Russian President Vladimir Putin’s visit to Beijing. He once again failed to reach an agreement on the construction of the Power of Siberia 2 gas pipeline, according to The Moscow Times.
Scale of the financial decline
According to the outlet, during trading on the Moscow Exchange, Gazprom shares fell by 3.5%, dropping to 119.06 rubles per share, making it the worst performer among all Russian blue-chip stocks.
In a single day, the gas giant lost about 100 billion rubles in market capitalization, and total losses since Putin’s visit to China exceeded 120 billion rubles (around $1.75 billion).
The failed negotiations also triggered a broader decline in the Russian stock market, including shares of oil companies and large-diameter pipe manufacturers, which had been expecting major orders for the new project.
Reasons for the failed talks
As the outlet noted, despite the participation of five Russian deputy prime ministers and the signing of multiple declarations, none of the 40 final documents from the visit addressed oil and gas cooperation. References to Power of Siberia 2 were entirely absent.
The main obstacle in the negotiations, which have been ongoing for more than 10 years, remains China’s pricing demands.
Beijing is reportedly insisting on lowering the price of gas to domestic Russian levels — around $50 per thousand cubic meters — which is five times lower than China’s current import price and about 8.5 times lower than Gazprom’s price for other foreign customers.
Putin–Xi Jinping talks
During his visit to Beijing, Russian President Vladimir Putin made his fifth attempt in the past four years to persuade Chinese leader Xi Jinping to support the construction of the Power of Siberia 2 gas pipeline.
The Kremlin had expected that turbulence in global energy markets would push China to be more flexible in gas price negotiations.
This latest meeting took place against the backdrop of a long history of personal relations, during which Xi Jinping and Putin have held more than 40 meetings, building what is described as a "no-limits" friendship through informal diplomacy.
However, despite the display of partnership, the Russian leader once again failed to secure an agreement on the new pipeline. Experts argue that Beijing continues to keep Moscow in a weak and dependent position, treating Russia primarily as a "raw-material appendage" for cheap energy resources, and viewing it as a toxic partner due to its international isolation.
