Gazprom shares plummeted on the Moscow Exchange following Vladimir Putin’s visit to China, as reported by The Moscow Times. The anticipated signing of the “Power of Siberia-2” gas pipeline deal failed to materialize, wiping over 120 billion rubles off the company’s market capitalization during the Russian leader’s trip to Beijing.
By the evening of May 20, Gazprom stocks had fallen by 3.5%, making them the worst performers on the Russian market. Investors, who had hoped for concrete details regarding the pipeline to compensate for lost European markets, were met with continued uncertainty. The blow extended beyond Gazprom, as companies like TMK, which expected significant pipe orders for the project, also saw their stocks crash.
Analysts note that this outcome highlights the fragility of Moscow’s “pivot to the East.” Despite Putin bringing a large delegation and signing a “declaration on a multipolar world,” none of the 40 documents signed involved cooperation in the oil and gas sector. Beijing continues to leverage Russia’s desperation, keeping the Kremlin in a strategic waiting room while prioritizing its own economic stability.
The broader Russian market also felt the shock, with the MOEX index closing 1% lower. Companies like Rosneft and Gazprom Neft also recorded losses as the market priced in the lack of tangible results from the summit. While Kremlin spokesperson Dmitry Peskov cited “unresolved nuances,” the reality remains clear: the absence of the pipeline deal leaves a massive hole in Russia’s future revenue projections. As Russia’s budget becomes increasingly opaque and its reliance on the Chinese market grows, the failure to secure the “Power of Siberia-2” deal marks another significant setback in the Kremlin’s attempt to mitigate the long-term economic damage caused by international sanctions and the loss of its primary energy client, the European Union.