Russia Cuts Gas Supply to Europe After Ukraine Transit Deal Ends, Marking Major Shift

As the clock struck midnight on New Year’s Day, Russia’s natural gas supply to Europe through Ukrainian pipelines stopped. 

According to Reuters, the cessation occurred because the gas transit contract between Russia and Ukraine expired, and no agreement was reached on its extension. 

This marks the end of a decade-long history of gas transit to Europe, which had persisted despite rising tensions between the two nations since Russia’s forceful annexation of Crimea in 2014. 

Ukraine has stopped purchasing Russian gas since 2015.

Ukraine’s Minister of Energy, Herman Halushchenko, issued a statement asserting, “Russia is losing markets and will incur financial losses.” He added that Europe had already decided to abandon Russian gas.

According to an analysis by Reuters, this decision will cost Ukraine around $800 million in annual transit fees, while Gazprom is projected to lose approximately $5 billion in gas sales. 

Gazprom, Russia’s state-owned energy giant, anticipated the end of gas transit through Ukraine, representing about half of Russia’s total pipeline exports to Europe. Russia exports gas through the TurkStream pipeline on the Black Sea bed. The pipeline consists of two lines supplying gas to Central European countries, including Turkey, Hungary, and Serbia.

Since the outbreak of the Ukraine war in 2022, the European Union (EU) has been actively seeking alternative energy sources to reduce its reliance on Russian energy. Moldova, a former Soviet republic, has been among the hardest-hit nations and has announced plans to reduce gas consumption by a third.

The Yamal-Europe pipeline, which traverses Belarus, has already ceased operations. In 2022, an underwater explosion destroyed the Nord Stream route, which connects Russia to Germany via the Baltic Sea.