Russia stopped supplying gas to Europe through Ukraine from January 1 because the 5-year transit agreement between the two countries expired.
Energy group Gazprom said the pipeline passing through Ukraine was closed at 8 a.m. in Moscow. Previously, Kiev repeatedly announced that it would not extend the agreement amid the conflict.
“Due to the continuous and clear refusal of the Ukrainian side to extend these agreements, Gazprom has been deprived of the technical and legal ability to supply transit gas through Ukrainian territory since January 1, 2025 “, Gazprom said.
The shutdown of the transit pipeline will cause Ukraine to lose about one billion euros in annual transit fees and Gazprom to lose 5 billion euros in revenue. Currently, Russia still exports gas to Europe through the TurkStream pipeline on the Black Sea.
Russia has transported gas to Europe through Ukraine since 1991. At its peak, Moscow supplied about 35% of the region’s gas.
Logo of Russian energy corporation Gazprom in Sofia, Bulgaria, April 27. Image: Reuters.
Since the Ukraine conflict broke out in February 2022, the European Union (EU) has stepped up efforts to reduce dependence on Russian energy. According to data published by Brussels, Russian gas will only account for about 8% of the bloc’s total imports by 2023, down sharply from more than 40% in 2021.
The EU has turned to alternative sources of supply from Qatar and the US. This effort caused Gazprom to record losses of up to 7 billion USD (6.73 billion euros) in 2022, for the first time in more than 25 years.
However, several EU members in the east still rely heavily on Russian supplies. Austria and Slovakia still spent a total of about 5 billion euros on purchases. Some European countries other than the EU, such as Moldova, face the risk of great damage when the pipeline through Ukraine stops operating.
Despite preparations and efforts to replace Russian gas, Europe is still clearly feeling the impact. Rising energy prices have severely affected the continent’s industrial competitiveness compared to the US and China.
The European Commission last month announced a plan to support member states in completely replacing Russian gas. They proposed options such as using supplies from Greece, Türkiye and Romania via the trans-Balkan route.
Norwegian gas is also seen as a viable option, with the possibility of shipping via Poland, while Germany could support gas distribution in central Europe. However, this plan faces major challenges in terms of new investment in infrastructure.