How China Became Asia’s Energy Middleman

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The Iran War revealed what years of pipeline deals and LNG contracts quietly built: a Chinese stranglehold on Asia’s gas supply.

When Reuters reported that Chinese companies had resold a record 19 LNG cargoes in the first quarter of 2026 alone—10 to South Korea, five to Thailand, and the rest split among Japan, India, and the Philippines—the story was framed as shrewd trading. And it was. Russian pipeline gas costs Beijing around $250 per thousand cubic meters. Asian spot prices had blown past $830. The markup was obscene. But the story behind the story is far bigger than one quarter’s arbitrage profits.

What the Iran War has done is tear the wrapping off a structural shift a decade in the making. China is not merely reselling surplus gas. It is building something no country has attempted before: a three-tier supply architecture that makes it the swing supplier for the entire Asia-Pacific. Buy cheap overland, contract massive liquefied natural gas (LNG) volumes worldwide, release the surplus to neighbors at whatever price the market—or the crisis—will bear.

China’s Expanding Pipeline Network and Eurasian Gas Supply Routes

In 2025, Gazprom pushed 38.8 billion cubic meters (bcm) through Power of Siberia 1 (PoS-1)—more than its contractual maximum, more than all pipeline exports to Europe, including Turkey combined. Five years ago, that would have been front-page news. Today, it barely registers because the pipeline map keeps expanding.

The Far Eastern Route—sometimes called Power of Siberia 3—is scheduled to begin deliveries in 2027. Initial flows will be small, around two bcm, but the design target is 10-12 bcm per year, fed from Sakhalin’s offshore fields. In September 2025, Gazprom and China National Petroleum Corporation (CNPC) agreed to raise the combined throughput of PoS-1 and the Far Eastern Route to 56 bcm, up from the previously contracted 48 bcm. These are not aspirational numbers. The steel is in the ground.

On the Central Asian side, Turkmenistan already delivers about 40 bcm a year through three parallel lines of the Central Asia-China pipeline, making it China’s single largest pipeline supplier. CNPC began Phase four commercial development of the Galkynysh field—the world’s second-largest gas deposit—in early 2026. And then there is Line D: a fourth pipeline through Tajikistan and Kyrgyzstan that would add another 30 bcm. President Xi Jinping has personally pushed Central Asian leaders to speed it up. Construction has been plagued by delays, but one critical Tajik tunnel is complete, and the political will looks stronger than at any point in the project’s tortured history.

Power of Siberia 2 (PoS-2) is the project that could change the picture entirely—if it happens. The proposed 50 bcm pipeline from Yamal through Mongolia would redirect the very molecules that once heated German homes toward Chinese factories. A legally binding memorandum was signed in September 2025. More telling, China’s 15th Five-Year Plan, approved by the National People’s Congress in March 2026, included the pipeline—but only in the language of “advancing preparatory work.” That is a political signal, not a commercial commitment. Price remains the central sticking point: Beijing has pushed for terms closer to Russia’s subsidized domestic rate, while Gazprom needs something higher to keep the project above water. The Iran War may........

© The National Interest