The latest flare‑up between Iran and Israel has rippled far beyond the Middle East, prompting China to reassess Russia’s Siberia 2 gas pipeline project. For a nation heavily reliant on energy imports, disruptions in the Strait of Hormuz—particularly amid threats from Iran—expose vulnerabilities in China’s maritime-based fuel supply. In this context, reopening negotiations on a vast land‑based pipeline offers Beijing a strategic hedge.
Strait of Hormuz risk: Iran’s threats to close this vital chokepoint, through which ~20 % of global oil and LNG flows, expose China’s dependence on unstable routes
LNG supply volatility: Roughly 30 % of China’s gas imports come via LNG through Hormuz—from Qatar, UAE—making it vulnerable to regional conflict
Land-based alternatives: A pipeline from Russia would create a more secure, politically insulated supply chain beyond maritime risk.
Designed to transport ~50 bcm/year of Russian gas to China via Mongolia, this pipeline has been delayed due to disagreements over pricing, equity, and China’s aversion to over-dependency s the calculus
The Iran–Israel war has increased China’s appetite for stability. According to WSJ analysis, Beijing is reconsidering the stalled energy project amid Middle Eastern instability
A decision may materialize before the year’s end, with Russian President Putin’s planned September visit to China seen as pivotal for relaunching negotiations
Supply diversification: Reduces reliance on LNG and tanker routes through Hormuz.
Green transition support: Natural gas serves as a lower‑carbon bridge as China shifts from coal
Geopolitical leverage: Signals deeper strategic alignment with Russia amid Western sanctions.
Pricing deadlock: Negotiations stalled over gas prices and contractual terms.
Ownership issues: China wants a stake in the project; Russia prefers to retain control.
Long timeline: Construction could take 5+ years before delivering gas