Russian President Vladimir Putin has achieved what Western leaders feared: He has cut a big, long-term deal to supply natural gas to China, a pivot to the East that makes Russia much less vulnerable to whatever sanctions the West might impose.
The gas contract had been 10 years in preparation, mostly because the parties haggled relentlessly over the price. The parameters of the deal made public by Alexey Miller, chief executive officer of Russia's near-monopoly gas producer, Gazprom, suggest the final price will be roughly $10 per million British thermal units. That is less than Russia may have wished for, but about as much as it makes sense for China to pay.
Data from Platts suggest that the weighted average price of gas from Myanmar, Turkmenistan and Uzbekistan came to about $10.14 last year. This year, Gazprom expects to export its gas at the average price of $10.62 per million Btu, but traditional consumers in Europe are trying to bargain it down.