MOSCOW/KYIV, Jan 1 – The flow of Russian natural gas through Ukraine’s Soviet-era pipelines ceased on New Year’s Day, marking the end of an era in which Moscow held dominance over Europe’s energy markets.
Gazprom, Russia’s state-controlled energy giant, confirmed the stoppage at 0500 GMT, attributing it to Ukraine’s refusal to renew the transit agreement. This move follows nearly three years of war between the two nations, during which the gas supply had continued uninterrupted.
Minimal Disruption to European Energy Markets
Unlike the energy crisis of 2022, which saw soaring gas prices and a ripple effect on European economies, the current halt is expected to have minimal impact on EU consumers. Slovakia and Austria, the last EU nations relying on Russian gas through Ukraine, have secured alternative supplies.
Hungary, however, will continue to receive Russian gas via the TurkStream pipeline, which bypasses Ukraine by running under the Black Sea.
The breakaway Moldovan region of Transdniestria, heavily dependent on Russian gas, has felt the brunt of the transit cut. Early Wednesday, local energy company Tirasteploenergo announced it had halted heating and hot water services for households.
EU’s Preparedness and Shift Away from Russian Energy
The European Union had anticipated the halt and bolstered its infrastructure accordingly. A spokesperson for the European Commission highlighted the bloc’s readiness: “The European gas infrastructure is flexible enough to provide gas of non-Russian origin.”
Since the onset of the Ukraine war, the EU has diversified its energy sources, increasing imports of liquefied natural gas (LNG) from Qatar and the United States, and boosting piped gas imports from Norway. These efforts have significantly reduced the EU’s dependence on Russian energy.
Ukraine, which refused to extend the transit agreement, views the development as a milestone. “This is a historic event. Russia is losing its markets and will suffer financial losses,” stated Ukraine’s Energy Minister German Galushchenko.
Economic Consequences for Both Nations
The cessation of gas transit has financial implications for both countries. Ukraine stands to lose approximately $800 million annually in transit fees. Meanwhile, Gazprom faces a revenue shortfall of nearly $5 billion, as its once-dominant hold over Europe’s gas market continues to crumble.
At its peak, Russian gas accounted for 35% of Europe’s supply, with pipeline exports reaching a record 201 billion cubic meters (bcm) in 2018. However, multiple disruptions—including the shutdown of the Yamal-Europe pipeline via Belarus and the destruction of Nord Stream under the Baltic Sea—have drastically reduced exports.
By 2023, Russia had shipped just 15 bcm of gas via Ukraine, a significant drop from 65 bcm in 2020.
Hardships in Transdniestria
For residents of Transdniestria, the halt in Russian gas transit has caused immediate hardships. Tirasteploenergo advised residents to conserve energy by gathering in single rooms, insulating windows, and using electric heaters where possible.
The End of an Era
The stoppage of Russian gas via Ukraine marks a turning point in Europe’s energy landscape. With diversified supply chains and reinforced infrastructure, the EU has significantly reduced its dependence on Russian energy, underscoring a decisive shift toward energy independence.
As Europe adapts to its new energy paradigm, both Russia and Ukraine face the financial consequences of this historic decoupling.
