Russia’s natural gas exports to Europe via Soviet-era pipelines passing through Ukraine have been halted early on New Year’s Day. This is due to the expiration of the transit agreement and the failure to reach a new agreement between Moscow and Kyiv, which are in a state of war.
The closure of Russia’s oldest gas route to Europe marks the end of a decade-long tense relationship that began with Russia’s annexation of Crimea in 2014. Ukraine stopped purchasing Russian gas the following year.
“We have stopped the transit of Russian gas. This is a historic event. Russia is losing its markets and will face financial losses. Europe has already decided to give up Russian gas,” said Ukrainian Energy Minister German Galushchenko in a statement.
The cessation of gas flow was expected following the war that began in February 2022. Ukraine had insisted it would not extend the agreement due to the ongoing military conflict.
According to an industry source, Gazprom had anticipated that there would be no gas transit through Ukraine, which accounted for about half of Russia’s total gas exports to Europe via pipelines last year.
Russia continues to export gas via the TurkStream pipeline under the Black Sea. TurkStream has two lines—one for the Turkish domestic market and the other supplying Central European customers like Hungary and Serbia.
After the military conflict in Ukraine in 2022, the European Union accelerated its efforts to reduce its reliance on Russian energy by seeking alternative sources.
Countries such as Slovakia and Austria, which previously received Russian gas via Ukraine, have adjusted their supply routes. Moldova, once part of the Soviet Union, is among the worst-hit countries. It now says it will need to reduce its gas consumption by a third.
No Response Yet from Europe
There has been no immediate response from Europe as of early Wednesday.
The five-year natural gas transit agreement between Russia and Ukraine expired on January 1.
In a statement on Telegram, Gazprom said, “Due to Ukraine’s repeated and explicit refusal to renew these agreements, Gazprom has been deprived of the technical and legal ability to supply gas via Ukraine from January 1, 2025.”
Gazprom also added that, starting at 08:00 Moscow time (05:00 GMT), no gas would be transported through Ukraine.
The Ukrainian Energy Ministry stated that the halt in Russian gas transit was due to “national security interests.”
Ukraine is facing a loss of approximately $800 million in transit fees annually, while Gazprom is projected to lose around $5 billion in gas sales.
