Russian markets tumble as Putin's China trip fails to secure gas pipeline deal
Russian markets fell sharply after President Vladimir Putin’s visit to China ended without a deal on the Power of Siberia 2 gas pipeline. The MOEX Russia Index dropped 1%, while key energy stocks suffered heavier losses. Gazprom’s shares plunged 3.5% to 119.06 rubles, wiping nearly 100 billion rubles (over $1.75 billion) from its market value since Putin’s trip began. The decline followed confirmation that no agreement was reached on the pipeline’s construction timeline. Kremlin press secretary Dmitry Peskov stated that negotiations had stalled, leaving the project in limbo.
The main obstacle remains pricing. China is demanding rates close to Russia’s domestic gas prices—around $50 per thousand cubic meters. This is roughly five times lower than China’s current import costs and nearly nine times less than what Gazprom charges other long-haul customers.
Other energy firms also took a hit. Rosneft, Gazprom Neft, and Novatek all saw share prices fall. TMK, a pipe supplier ready to provide materials for the project, experienced a 6% drop as hopes for the pipeline faded. The issue was notably absent from the 40 documents signed during Putin’s visit, leaving investors disappointed. Putin returned from Beijing without any major new oil and gas contracts. The failure to secure a deal on Power of Siberia 2 has left Russian energy companies facing uncertainty. Markets reacted with declines across the sector, reflecting concerns over future revenue streams.
