Caleb HamiltonRussian crude oil (tracked via USO) continues to trade at steep discounts as China leverages its economic dominance over Moscow, with Urals crude selling roughly $12 a barrel below the ICE Brent benchmark and Russia's premium ESPO blend fetching about $9 a barrel less, according to a European Union energy security source.
Discount Math: What Russia Is Losing on Every Barrel
Those price gaps translate into real money leaving Moscow's treasury and landing in Beijing's. Chinese customs data reviewed by the Gaidar Institute shows the discounts saved China $2.2 billion in 2025 alone, pushing cumulative savings over four years to nearly $12 billion. The same European source told OilPrice.com that official customs figures likely understate the true discount by 30 to 40 percent depending on the grade of crude involved.
Gas tells an even harsher story for Russia. Because so much of its natural gas moves through fixed pipelines running straight into China, Moscow has nowhere else to sell it. The discount on gas flowing through the Power of Siberia pipeline runs as high as 45 percent compared with what Russia still charges its shrinking list of European customers. That pricing gap has effectively stalled Power of Siberia 2, the follow up pipeline project that Russian President Vladimir Putin reportedly pushed hard for during his recent summit with Chinese leader Xi Jinping, only to leave the meeting without Xi's sign off.
A Pipeline Stuck in Neutral
Moscow and Beijing signed a memorandum of understanding on Power of Siberia 2 back in September 2025, but talks over pricing, financing and contract terms have gone nowhere since. China is reportedly insisting on rates close to what Russia charges its own domestic customers, prices so low that Gazprom would lose money on every cubic meter it ships and would struggle to fund the pipeline's construction under those terms.
For Putin, the stalled project carries real urgency. Europe's sanctions on Russian energy are tightening, and Russia badly needs new gas revenue streams to replace what it's losing in that market. Xi's willingness to let the deal sit unsigned, even as his ally pushes for it, says a lot about where the leverage in this relationship actually sits.
The imbalance shows up outside energy too. China's economy is roughly eight times the size of Russia's on a nominal GDP basis, and while Russia accounts for only about 4 percent of China's total trade, China remains the largest exporter in the world. That gap has bled into the war effort directly: Russia now imports more than 90 percent of its sanctioned technology from China, up 10 percentage points from 2025. Chinese components have turned up in intercepted Kinzhal hypersonic missiles, Chinese microchips power the targeting systems in Iskander ballistic missiles and Lancet loitering munitions, and Chinese engines have reportedly been shipped to Russia disguised as refrigeration parts to power long range suicide drones.
Territorial Undercurrents in the Russian Far East
Beneath the economic and energy dynamics sits a quieter, longer running story about territory. Land north of the Amur River in Russia's Far East once belonged to the Qing Empire's Manchurian homeland before the Russian Empire annexed it in the mid 19th century. Beijing officially insists the shared border is
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