Ukraine has announced the cessation of Russian gas transit to Europe via its territory following the expiration of a five-year transit agreement on Wednesday, January 1.
The shutdown of one of Russia’s oldest gas routes to the European Union was anticipated and coincides with the approach of the war’s fourth year. Ukraine’s energy ministry cited “national security interests” as the reason for ending the deal.
“This marks a historic moment as we have stopped the transit of Russian gas,” the ministry stated, noting that its gas transportation infrastructure was prepared in advance for the transition.
Since the Russian invasion of Ukraine in February 2022, the European Union has actively worked to diversify energy sources and reduce reliance on Russian gas. Pipeline gas imports from Russia to the EU have plummeted, falling from over 40% in 2021 to approximately 8% in 2023, according to the European Council.
With the closure of the Ukrainian transit route, Russia now has only one remaining pipeline to deliver gas to Europe: the TurkStream pipeline, which runs through Turkey to Bulgaria.
Gazprom, Russia’s state-owned gas giant, signed the transit deal with Ukraine’s Naftogaz in 2019. Last year, Gazprom reported a $6.9 billion loss—its first in over two decades—due to declining European sales, despite increased exports to China.
Ukraine stands to lose approximately $800 million annually in transit fees, while Gazprom faces an estimated $5 billion loss in gas sales, according to Reuters.
Several European nations still purchasing Russian gas, including Slovakia and Austria, have already secured alternative supply routes, Reuters reported.
