The Kremlin’s strategic pivot to the East has suffered a severe blow. Moscow’s long-coveted ‘Power of Siberia 2’ natural gas pipeline, a project designed to lock Beijing into a decades-long energy dependency, has collapsed. President Xi Jinping’s decision to walk away from the deal is not a mere commercial negotiation failure. It is a geopolitical statement. China is signalling that it will no longer be a junior partner in Russia’s energy architecture, but a sovereign actor defining its own supply chains.
This is a threat vector. For Russia, the loss of the pipeline means a critical revenue stream is severed at the worst possible time. Western sanctions have already cratered Russian gas exports to Europe. Moscow needed China as its replacement market. Now, that option is gone. The strategic pivot to Asia, a core pillar of Putin’s post-Ukraine war strategy, is now an operational failure.
Let’s examine the hardware. The ‘Power of Siberia 2’ was to run 2,600 km from Russia’s Yamal Peninsula to China’s Xinjiang region. Capacity was planned at 50 billion cubic metres per year. That volume, now absent, means Russia’s Gazprom faces stranded assets and a massive revenue gap. China, meanwhile, is not suffering. It has diversified suppliers, including Qatar, Australia, and Turkmenistan, plus growing domestic production from the Tarim Basin. Beijing can afford to wait. Moscow cannot.
Why did Xi kill the deal? Timing is everything. China is in the midst of a strategic courtship with the Global South and the West. It is de-escalating trade tensions with the United States, expanding partnerships in the Middle East, and positioning itself as a neutral broker in the Ukraine conflict. Signing a long-term reliance on Russian gas would undercut that narrative. It would signal allegiance to a pariah state. Xi is too shrewd for that.
Furthermore, the intelligence failure here is staggering. Moscow clearly overestimated its leverage. They believed that China’s energy demand was so insatiable that it would accept any Russian terms. They were wrong. China’s industrial output is plateauing, and its transition to renewables is accelerating. The International Energy Agency reports that China added 230 GW of solar capacity in 2023 alone. The long-term demand for Russian gas is not guaranteed.
There is also a cyber dimension. Chinese state-linked hackers have been probing Russian energy infrastructure for years. This is not a trust-based relationship. Xi and Putin may smile for cameras, but beneath the surface, a cold game of mutual exploitation is under way. The pipeline collapse is a move in that game.
For the broader security landscape, this is a watershed moment. Russia’s influence in Eurasia is waning. The Trans-Siberian Railway and the Northern Sea Route remain, but without energy leverage, Russia becomes a weakened flank. China, meanwhile, is strengthening its grip on Central Asia through the Belt and Road Initiative, offering infrastructure but no military guarantees. The balance of power in the region is shifting.
The bottom line: Putin’s strategic pivot to China has failed. The Kremlin’s intelligence community, the GRU and SVR, failed to read Beijing’s intentions. They treated a temporary tactical alignment as a permanent strategic marriage. That is a fatal error. Expect Russia to now scramble for alternative buyers, perhaps India or Turkey, but neither can absorb the volume. The economic bleeding will continue.
For the UK and NATO, this is not a moment for celebration. A weakened Russia is unpredictable. It may become more reckless in its nuclear rhetoric or more aggressive in hybrid warfare. We must prepare for a Kremlin that feels cornered and acts accordingly.
This is Dominic Croft, Defence and Security Analyst, signing off. The chessboard never stops moving.
