The much-anticipated summit between President Vladimir Putin and Chinese leader Xi Jinping in Beijing has concluded without a signed agreement for the proposed Power of Siberia 2 gas pipeline. The failure to secure a deal marks a significant setback for Moscow’s strategy to redirect its energy exports eastwards amid Western sanctions. In parallel, the United Kingdom has issued a stark warning to European nations: the continent must permanently wean itself off Russian energy supplies.
According to sources familiar with the negotiations, the pipeline project stalled over disagreements on pricing, construction timelines, and financing terms. Russia had hoped to finalise the agreement to boost gas deliveries to China by an additional 50 billion cubic metres per year, offsetting the loss of European markets. However, Beijing’s insistence on a fixed price formula linked to local market benchmarks proved unacceptable to Gazprom, which sought a premium for the long-term contract.
“China is a buyer’s market for gas,” said Dr. Elena Morozova, an energy analyst at the Oxford Institute for Energy Studies. “Beijing has the leverage to demand favourable terms, and Moscow’s desperation is showing. Without a deal, Russia’s pivot to Asia remains incomplete.”
The lack of a pipeline agreement comes as the UK’s Energy Security Secretary Claire Coutinho delivered a blunt address in London, urging European allies to accelerate the transition away from Russian fossil fuels. “Dependence on Russian energy is a strategic vulnerability we can no longer afford,” she said. “The era of cheap Russian gas is over, and every gigawatt of renewable capacity we install reduces Putin’s ability to blackmail our economies.”
Coutinho’s remarks underscore the ongoing shift in European energy policy. Since Russia’s full-scale invasion of Ukraine in 2022, the EU has slashed its reliance on Russian gas from 40% of imports to under 8% in 2024. Yet, the UK has already ceased all Russian gas imports and is pushing for a continent-wide ban on liquefied natural gas (LNG) purchases if Moscow attempts to reassert dominance.
The collapse of the Beijing summit has immediate implications for global energy markets. European benchmark gas prices rose 3% on Monday as traders priced in a potentially tighter market this winter. Russia’s alternative outlet to China remains uncertain, and Europe’s storage levels, while high at 95% capacity, could be depleted if a cold snap coincides with further supply reductions.
“This is a physics problem, not a political one,” said Dr. Vance. “Every molecule of gas not delivered to Europe must be stored, flared, or find a new buyer. China’s growth is slowing, and its renewable buildout is aggressive. The economic calculus for new pipelines is becoming less favourable by the day.”
The Power of Siberia 2 pipeline, which would run through Mongolia, was seen as a cornerstone of Russia’s energy strategy. Without it, Moscow must rely on existing infrastructure and spot market sales to Asian clients. In contrast, Europe is accelerating its green transition: wind and solar capacity additions in the EU are projected to exceed 100 gigawatts in 2024, a record.
“What we are witnessing is the long-term structural decline of the fossil fuel era,” Dr. Vance added. “The sooner we acknowledge the urgency of building a decarbonised grid, the less painful the transition will be. Every day of delay is a day of risk.”
As the summit ended, Putin’s press secretary Dmitry Peskov described the talks as “constructive but not productive on all fronts,” leaving the door open for future negotiations. However, the UK’s warning serves as a reminder that Europe’s energy security must remain independent of Russian whims.
For now, the world stands at a crossroads. One path leads to deeper fossil fuel lock-in, environmental degradation, and geopolitical instability. The other demands a rapid, just, and carefully managed energy transition. The data suggests there really is no choice at all.
