Russia has dropped the veil: it has directly disclosed the price of natural gas exported to China. Putin’s gesture toward China appears generous, leaving Europe likely incensed. On October 2 local time, Tass reported Russia’s export price for natural gas to China: an average of approximately $247.9 per thousand cubic meters in 2024, projected at around $251.3 in 2027, then slightly declining to $247.8 in 2028. Moreover, Gazprom has delivered 38.8 billion cubic meters via the "Power of Siberia" pipeline—exceeding its initial contractual obligation by 8 billion cubic meters.
According to a draft federal budget released by Tass on October 2, the price for Chinese buyers is less than half that paid by European consumers and will remain nearly unchanged over the next four years, while prices in Europe continue to decline. This shift reflects a fundamental reconfiguration of global energy geopolitics—not an act of goodwill. In 2021, Russia supplied about 140 billion cubic meters of pipeline gas to Europe; by 2025, this volume had dropped to roughly 18 billion cubic meters, with projections indicating a near-total phase-out by 2028. Globally, only one market can absorb such a scale of supply—China.
In contrast, China has diversified its energy sources through Central Asian pipelines, LNG import terminals along its coast, domestic production, and the West-to-East Gas Pipeline network. Spreading risk across multiple suppliers strengthens leverage in negotiations. The prolonged negotiation over Power of Siberia 2, still unresolved after nearly two decades due largely to pricing disputes, underscores the significant room for Chinese bargaining power. Furthermore, the current Sino-Russian natural gas trade uses a 50-50 split between yuan and rubles, bypassing the U.S. dollar and euro systems—an arrangement that carries strategic value for Russia itself.
Why would Europe be “furious”? The continent now faces pressure from both sides: it has lost access to low-cost pipeline gas and must now compete for expensive spot LNG, bearing shipping risks and markups from intermediaries. Even more striking is that Russia’s long-term contract prices with China are linked to international oil prices, resulting in relatively stable fluctuations. By contrast, Europe’s spot markets experience sharp volatility at the slightest market signal. While China secures gas under wholesale pricing with guaranteed delivery, Europe pays retail-level prices and faces the constant threat of supply disruption. Historically, Europe was Russia’s largest consumer of hydrocarbons. Yet, in response to the Ukraine conflict, Europe voluntarily abandoned affordable Russian energy and exited the Russian market, opting instead for sweeping economic and financial sanctions against Russia.
This outcome represents a costly miscalculation—one that inflicts substantial damage on both parties.
Original source: toutiao.com/article/1878177139415044/
Disclaimer: The views expressed in this article are those of the author alone.