The recent summit of the Shanghai Cooperation Organisation in Tianjin, China, spotlighted the shifting power dynamics of the global chessboard. The concerted, friendly interactions between Indian Prime Minister Narendra Modi, Russian President Vladimir Putin, and Chinese President Xi Jinping are a testament to the changing allegiances which no one foresaw at the commencement of 2025. The summit—which took place alongside the groundwork for the Power of Siberia 2 (POS-2) pipeline, designed to funnel Russian natural gas to China—signalled more than mere diplomacy. It announced a considerable redistribution of energy geopolitics, highlighting the diminishing role of Europe, the counterforces faced by US LNG exports, and the collapse of the US strategic dominion over Russia conceived under the watch of ex-National Security Advisor Zbigniew Brzezinski during the tumultuous 90s.
The assembly at Tianjin solidified a freshly altered geopolitical equation. Leaders from India, Russia, and China—the trio comprising half of the globe’s five largest economies—demonstrated a burgeoning synergy, substantiated not merely through discourse and visuals, but also actual energy deals. Initiation towards POS-2, a pipeline designed to channel 50 billion cubic meters of gas from Russia’s Yamal fields to China via Mongolia, finds itself at the heart of this fresh paradigm. Unlike the pre-existing Power of Siberia 1, which extracts gas from Irkutsk (towards Mongolia’s north), POS-2 relies on the same Arctic reserves in Yamal that powered Germany’s industrial unit for decades. German prosperity was dependent on a mutually beneficial clause—low-cost Russian gas for valuable German-made exports. This constituted the core of Willy Brandt’s Ostpolitik and was instrumental in Germany’s ascension as the economic juggernaut of Europe.
An intensified reorientation towards Asia marks Russia’s strategic preference, accelerated by Western sanctions post the 2014 annexation of Crimea, and further spurred by the 2022 Ukraine incursion. With the advent of POS-2 and the augmentation of existing pipelines, it’s estimated that Russia could supply up to 100 billion cubic meters of gas on an annual basis to China post-2030 when the pipeline is expected to be operational. This amount is significantly less when compared to the peak export of 150 bcm to Europe. Besides, the rate of natural gas sold to China—a value-conscious market—is also going to be considerably lesser than what was previously earned from European customers.
Despite the economic jolt of reduced prices and volumes, this transformation leaves Russia more secure economically after the Nordstream pipeline interferences and reduces China’s dependence on pricey seaborne LNG – a resource that typically costs two to four times more than piped gas. Constitutionally, it lowers China’s susceptibilities to US naval supremacy in essential transit points like the Strait of Hormuz and the Straits of Malacca, which serve as the conduit for all Middle Eastern gas exports to China.
For India, the summit in Tianjin provided a platform for expressing its dissent. In response to the Trump administration levying a steep tariff hike from 25% to 50% as retribution towards India’s engagement with Russian crude oil, Prime Minister Modi hinted at a possible shift. Unprecedentedly, Modi reportedly rejected multiple calls from President Trump, an act seldom displayed by global leaders towards a US President. India, now the fourth-largest economy in nominal GDP terms, has not only cemented diplomatic relations with Russia and China but also plans to raise its imports of Russian oil this month, effectively sidestepping the US secondary sanctions.
The pivotal shift underscores India’s autonomy and dismisses what its Foreign Minister S. Jaishankar described as the duplicitous US policy during his recent Moscow visit. Minister Jaishankar took exception to the fact that despite China importing a significantly higher volume of Russian oil and Europe continuing to be the largest purchaser of Russian gas, it was India facing these stringent tariffs. Even three years into the Ukraine war, both the US and European Union continue to import a considerable volume of Russian energy and commodities, from liquefied natural gas to enriched uranium.
The sanctions imposed have had the opposite effect to predictions, inducing a ‘pie on the face’ moment. The European Commission President Ursula Von Der Leyen’s assertion in 2022 that the ‘Russian industry was in ruins’ and that they were ‘scraping parts from kitchen appliances to fix their military equipment’ now seems premature. Current times see Germany, France, and the UK teetering on the brink of economic and political instability while Russia exhibits no signs of decrepitude. The nation has instead charted an eastward course, forming new energy and trade alliances with countries such as China, India, Turkey, and Brazil.
The POS-2 agreement, despite being at a preliminary stage absent a finalized purchase contract, signifies Russia’s success in discovering alternative markets for its gas. The ‘binding note’ is still void of crucial information related to price, ‘take or pay’ terms, tenure of the long-term contract, and relative contributions towards capital costs. The fact that China is ready to overlook its long-standing reservations concerning an increased dependence on Russia’s energy resources underscores the operative shift.
Germany – once the fountainhead behind Europe’s growth – now faces de-industrialisation and a soaring unemployment rate. The scarcity of affordable Russian gas has coerced a dependence on pricier imports of US and Qatari LNG, leading to a rise in energy costs and a consequent loss of competitive edge. German living standards are on the decline, burdened by increasing debts and an increasingly unsustainable welfare system. By redirecting Yamal gas to China, Russia not only secures a fresh market but also poses a threat to US LNG exports.
The restructuring of the global energy paradigm serves as a stunning testament of the Western hubris leading to its own diminishing prominence. Indian defiance, Russian maneuvering, Chinese cunning, and an unexpected diminution in the power dynamics, have all contributed to a dramatic reshaping of the global energy landscape that was once dominated by Western influence. The increase in Russian oil imports by India, a decision that overtly defies US sanctions, signals a close alignment with the BRICS consortium which may offer an alternative to the Western-dominated financial and trade mechanisms.
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