Anton Gerashchenko
@Gerashchenko_en
Russian Energy Minister Sergey Tsivilev (husband of Putin's cousin Anna Tsivileva) clarified the situation regarding the Power of Siberia-2 gas pipeline at the Eastern Economic Forum, which was supposedly the main outcome of Putin's visit to China.
According to Tsivilev, the "legally binding memorandum" mentioned by the head of Gazprom only covers the pipeline route and the volume of gas to be supplied. The financing of the project, however, will be discussed only next year.
China has remained silent regarding this project. The lack of specifics led to Gazprom's shares falling on the Russian stock exchange.
However, Russians have already signed an agreement to increase gas flows via the existing Power of Siberia-1 pipeline - from 38 to 44 billion cubic meters per year.
This news was surprising, as the combined production capacity of the two fields feeding Power of Siberia-1 currently stands at only 42 billion cubic meters per year.
Of this, 38 billion go to exports, while the rest supplies energy to Far East, Irkutsk region, and Yakutia.
Economists had assumed that Gazprom would need to purchase gas from other companies - Rosneft, Surgutneftegaz, and INK.
However, at the Eastern Economic Forum in Vladivostok, Putin stated that the region faces a gas deficit and ordered the start of a transition to coal as a new energy source.
‼️ In other words, the increase in gas exports to China will primarily come at the expense of Russian domestic consumers.
What is really happening in Russia's energy market:
◾️ Russia has lost the ability to dictate oil trade terms in the Asian market. Key parameters - volumes, discounts, and payment currency - are now determined by buyers, primarily India and China, who exploit Moscow's near-total lack of alternative markets.
◾️ US and EU sanctions against the Russian oil sector, including tanker fleet restrictions and secondary sanctions on Indian and Chinese entities, objectively complicate logistics and raise freight costs. However, this is a problem only for the seller - buyers are not willing to account for these circumstances or offer support.
◾️ India and China are simultaneously pushing for higher discounts, citing sanctions risks and logistical costs. This strategy allows them to purchase raw materials at prices significantly below market rates, reducing Russia's foreign currency earnings.
◾️ Payments in yuan and, especially, in rupees effectively tie Russian companies to the Indian and Chinese markets, limiting their ability to use the proceeds. This creates long-term financial dependence and reduces the flexibility of Russia's foreign economic policy.
◾️ Despite their official rhetoric about "partnerships," India and China act purely pragmatically, treating Russia as a temporary source of cheap raw materials. Their approach does not imply mutual concessions beyond direct benefits for the buyer.
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8:57 AM · Sep 5, 2025 · 119K Views
https://x.com/Gerashchenko_en/status/1963949665587446189
