From the early morning of New Year’s Day 2025, Russia has stopped exporting natural gas to Europe through Ukraine. The reason is that the transit agreement that dates back to the Soviet era has expired, and the warring parties, Russia and Ukraine, have failed to renew the agreement.
The main natural gas transportation pipeline to Europe has officially closed after enduring a decade of turmoil, sparked by Russia’s annexation of Crimea. Starting from 2025, Ukraine has ceased purchasing natural gas from Russia.
Ukrainian Energy Minister German Galushchenko stated in a release, “We have halted the transit of Russian natural gas. This has historical significance. Russia is losing market share and suffering financial losses. Europe has decided to abandon Russian natural gas.”
The disruption of this oldest natural gas transportation pipeline in Russia was not unexpected. Since Russia’s full-scale invasion of Ukraine in February 2022, Ukraine has consistently stated that they will not extend transit deals with Russia during wartime.
Approximately half of Russian gas exports pass through Ukraine for transit. According to an industry source, Galushchenko had already committed last year to stop the transit of natural gas from Russia.
Russia continues to export natural gas through the TurkStream pipeline beneath the Black Sea. TurkStream consists of two lines, one supplying the domestic Turkish market and the other catering to Central European customers, including Hungary and Serbia.
Following the outbreak of the Russia-Ukraine war in 2022, the European Union has redoubled efforts to find alternative energy sources to reduce dependence on Russian energy.
Other countries that have been purchasing Russian natural gas through Ukraine, such as Slovakia and Austria, have already arranged alternative channels.
Moldova is one of the countries most severely affected. The nation has indicated the need to take measures to reduce gas consumption by one-third.
The five-year natural gas transit agreement between Russia and Ukraine expired earlier on January 1.
Gazprom, the Russian natural gas giant, stated, “Due to Ukraine’s repeated clear refusal to renew these agreements, Gazprom has been deprived of the technical and legal possibility to transport natural gas through Ukraine from January 1, 2025… Starting from 8:00 Moscow time, the supply of Russian natural gas transited through Ukrainian territory has been halted.”
The Ukrainian Energy Ministry also mentioned that, “for national security interests,” they have stopped the transportation of Russian natural gas through Ukraine.
Currently, Ukraine faces an annual loss of approximately $800 million in transit fees, while Gazprom stands to lose nearly $5 billion in natural gas sales.
For half a century, Russia and the former Soviet Union had established a major share in the European natural gas market, peaking at around 35%. However, the Russia-Ukraine war has almost decimated Gazprom’s business in Europe.
The Yamal-Europe natural gas pipeline through Belarus has also been closed, and the Nord Stream pipeline crossing the Baltic Sea to Germany was damaged in 2022.
In 2018, before the outbreak of the Russia-Ukraine war, Russia reportedly delivered a record-setting 201 billion cubic meters of natural gas to Europe through various routes.
However, by 2023, the volume of natural gas exported by Russia via Ukraine was only approximately 15 billion cubic meters, significantly lower than the 650 billion cubic meters at the start of the previous five-year agreement in 2020.
(This article referenced reporting from Reuters)