Russia-China diplomatic relations

What happened: Russian President Vladimir Putin is set to visit China on May 19-20, following U.S. President Trump's state visit to Beijing. This trip comes as the Iran war disrupts energy supplies, putting the long-stalled Power of Siberia 2 natural gas pipeline back on the agenda. Putin aims to bolster ties with China and extract key wins in trade and energy, while China seeks to tilt the partnership in its favor.

Market impact: The strengthening Russia-China relationship could disrupt global energy markets, particularly natural gas, as the Power of Siberia 2 pipeline could increase China's energy security. This could impact energy companies like Gazprom and China National Petroleum Corporation (CNPC), as well as energy-intensive industries. Additionally, the geopolitical dynamics may influence commodity prices and currency markets.

What to watch next: The outcome of the Putin-Xi meeting, particularly any progress on the Power of Siberia 2 pipeline, will be a key catalyst. Additionally, watch for any fallout from the recent Russian drone incident in the Black Sea, which could strain relations ahead of the summit. Lastly, monitor global energy markets for any supply disruptions or price fluctuations that could be influenced by Russia-China cooperation.