The growing tension in the Middle East will accelerate the negotiations on natural gas between Russia and China. "The decision could be made this year", predicted the head of a think tank that advises the Russian government on China issues, quoted by Reuters.
Russia is seeking an agreement to build the “Power of Siberia-2“ pipeline, which will deliver 50 billion cubic meters. gas annually to China, but the two sides have failed to agree on terms.
“With the sharp rise in tensions in the Middle East, it is advantageous for China to increase supplies from the north,“ said Kirill Babayev, head of the Institute of China and Contemporary Asia in Moscow.
“The question of the gas deal will arise again because this deal is able to guarantee China uninterrupted energy supplies. Under current conditions, by the end of the year we will see a decision on “Power of Siberia-2“, he predicted.
Russian President Vladimir Putin will travel to China in early September to participate in celebrations marking the anniversary of the victory over Japan in World War II. It comes after Chinese President Xi Jinping visited Moscow in May.
Babayev, whose think tank is involved in preparing Putin’s program, said the visit would be filled with political and economic discussions.
Economic cooperation with China has helped Russia in the face of Western sanctions imposed after its invasion of Ukraine in 2022. Trade between Russia and China jumped 26% in 2023, although it was only 1.9% in 2024.
In the first four months of 2025 it fell by 7.5%, but Babayev said new deals for energy and agricultural exports could revive growth this year.
He said problems with cross-border payments caused by the threat of secondary Western sanctions against Chinese banks, which have strained relations between Russia and China in 2024, had eased.
“We have a mutual understanding with our Chinese partners that money prefers silence. The less publicity there is on these issues, the more successfully these payments proceed. The Chinese side is cooperating with us and the new mechanisms are working well,” Babayev said.
A delegation of Chinese officials and executives will attend the St. Petersburg Economic Forum, Russia’s main economic conference, this week and participate in a panel discussion with Putin.
Babayev said Chinese investors are active in agriculture, oil and gas processing, food processing, logistics and the pulp and paper sector, but they often work through intermediaries and their presence is not always reflected in statistics.
“Chinese investors are entering the Russian market very cautiously and are trying not to make their presence too visible, creating joint ventures with Russian companies and operating under new brands,“ he said.