Janice R. Andrews
Russian Gas Deliveries to Europe Halt via Ukraine
Russian gas flow to Europe through Ukraine’s transit pipeline officially ended on January 1, 2025, as a five-year contract expired. The cessation of gas transit marks a significant shift in energy dynamics, described by Ukrainian Energy Minister German Galushchenko as a “historic event.”
This decision highlights the strained ties between Russia and Ukraine amidst ongoing geopolitical conflict and Europe’s broader push to reduce reliance on Russian energy.
Why Have Deliveries Ceased?
The halt in Russian gas transit stems from Ukraine’s refusal to renew the existing agreement. Ukrainian officials cited Russia’s continued invasion as a critical obstacle to renegotiating terms.
While Ukraine proposed a payment delay or freeze to Gazprom, Russia’s state-owned energy company, critics deemed the idea impractical, and no resolution was reached.
“We stopped the transit of Russian gas. This is a historic event. Russia is losing its markets, it will suffer financial losses. Europe has already made the decision to abandon Russian gas,” Galushchenko stated.
Although Ukraine stopped purchasing Russian gas for its own use in 2015, it continued to act as a transit country for European supplies. However, the ongoing conflict has now severed this remaining link.
Who Is Affected by the Shutdown?
The impact of the transit shutdown varies across nations, with some feeling immediate pressure while others remain unaffected:
- Slovakia: A NATO and EU member, Slovakia heavily relied on Russian gas via Ukraine. Prime Minister Robert Fico unsuccessfully sought an extension, including discussions with Russian President Vladimir Putin. Despite this, Slovakia has reported sufficient gas reserves to weather the immediate impact.
- Moldova: As a non-EU country, Moldova relied heavily on this pipeline and has warned of potential gas rationing, with possible usage cuts of up to one-third.
- Central European Nations: Countries like Hungary and Serbia are less affected, as they receive gas via the TurkStream pipeline, which bypasses Ukraine entirely.
Europe’s Transition Away from Russian Gas
The halt in Ukrainian transit is the latest step in Europe’s gradual shift away from Russian energy dependency.
In 2018, Gazprom supplied 201 billion cubic meters of gas to Europe. By 2023, this dropped to just 15 billion cubic meters via Ukraine, reflecting Europe’s diversification efforts and the effects of sanctions.
Although the EU has imposed several sanctions on Russian energy, it has not fully banned imports. In 2023, Russian gas accounted for 14.8% of Europe’s supply, down from 47% in 2021 before Russia’s large-scale invasion of Ukraine.
Economic Impacts
The cessation of gas transit through Ukraine will carry significant financial consequences for both nations:
- Ukraine: The country stands to lose approximately $800 million annually in transit fees.
- Russia: Gazprom faces an estimated $5 billion annual revenue loss.
These losses come as Russia grapples with the economic fallout of sanctions and diminishing access to European markets.
Future Outlook
The end of Russian gas transit via Ukraine highlights Europe’s determination to reduce reliance on Moscow while supporting Ukraine in its conflict with Russia. For Ukraine, this marks a symbolic victory but comes with economic risks tied to the loss of transit revenue.
Russia, meanwhile, must contend with shrinking energy markets in Europe, potentially increasing its focus on exports to Asia.
As Europe continues this energy transition, its priorities include boosting renewable energy, increasing LNG imports, and expanding alternative pipelines to secure a stable and independent energy supply.
