Russia has made two major compromises with China by giving Beijing the green light to build a railway in nearby Central Asia and accepting China’s suggestion of re-routing the Power of Siberia 2 gas pipeline to pass through Kazakhstan instead of Mongolia.
In the past few months, falling global energy prices have dented Russia’s export earnings. In December, oil prices fell to about US$70 per barrel, down 18% from this year’s peak of US$87 in April, due to lower demand in China and OPEC’s expectations to increase production.
Those lower prices come against the backdrop of G7 members, the European Union and Australia’s price cap of $60 per barrel on seaborne Russian…