Putin's visit to China sent Gazprom's stock plummeting
Shares of the Russian gas monopoly Gazprom plummeted on the Moscow Exchange following the conclusion of Putin’s visit to Beijing. The Russian dictator once again failed to reach an agreement on the construction of the strategic “Power of Siberia 2” gas pipeline.
This was reported by The Moscow Times.
During trading, the company’s shares fell by 3.5% (to 119.06 rubles per share), making them the biggest loser on the Russian market. In just one day, the holding company’s market capitalization shrank by 100 billion rubles, and total losses during the Chinese visit exceeded 120 billion rubles (about $1.75 billion). This failure dragged down the entire Russian stock market, including oil companies and pipe manufacturers.
Despite the large size of the Russian delegation, none of the 40 documents signed in Beijing pertained to the oil and gas sector. The main reason for the fiasco remains China’s tough price ultimatum. Beijing is demanding that the cost of gas be lowered to the domestic Russian level—$50 per thousand cubic meters. This is five times lower than China’s current payments to Europe and 8.5 times less than Gazprom’s price for other international customers.
During negotiations in Beijing on May 20, Xi Jinping and Vladimir Putin agreed on the parameters of the new “Power of Siberia-2” gas route. The parties agreed on the project’s route, but the issues of pricing and the supply schedule remain unresolved.
In Beijing on May 20, Chinese President Xi Jinping and Russian dictator Vladimir Putin signed a joint declaration on the establishment of a multipolar world. The document reportedly declares the parties’ intention to develop “new-type” international relations and strengthen cooperation amid global geopolitical changes.
