NEW YORK (TheStreet) -- I was talking today to Jim Cramer about the blockbuster natural gas deal that was signed between Russia and China. The 30-year, $400 billion deal to ship Russian gas via pipeline to Eastern Chinese cities changes everything.
First, it changes the calculus of U.S. relations with Russia and China. Now that the two superpowers are connected much more closely through energy supply, the U.S. will find both nations less easy to influence. Their combined economic cooperation makes each stronger.
But from a global energy standpoint, the deal couldn't be more important. Russia's Vladimir Putin used the opportunity of this Chinese summit to complete a deal that has been threatened for almost 10 years, delivering the concessions needed to find another very stable market for Russian gas exports, which will in turn make them far less reliant upon Eastern Europe and EU sales.
That, in turn, gives them far greater leverage into the Ukraine outcome and with a ready customer to the East; they are far more capable of turning the spigots down in the winter to the West in order to accomplish political goals.
The total deal on gas to China will ultimately amount to more than 60 billion cubic meters a day, or almost half of the volume that Russia shipped to all of Europe in 2013. With that kind of alternative market, there is going to be a frantic thrashing in European capitals to quickly find reliable sources of natural gas outside of Russian pipes.