Jan 1 2025: Russian natural gas exports through Soviet-era pipelines crossing Ukraine to Europe came to a halt in the early hours of New Year’s Day after the transit agreement between Moscow and Kyiv expired. The two nations, embroiled in conflict, failed to reach a deal to continue the gas flows.
The shutdown marks the end of a contentious decade in gas relations, beginning with Russia’s annexation of Crimea in 2014. Ukraine ceased purchasing Russian gas in 2015.
“This is a historic moment. Russia is losing its markets and will face financial losses, while Europe has already moved to abandon Russian gas,” Ukraine’s Energy Minister German Galushchenko stated.
The cessation of gas transit was anticipated amid ongoing hostilities that began in February 2022. Ukraine remained firm in its decision not to extend the deal during the conflict.
Industry sources revealed that Gazprom had already accounted for the absence of Ukrainian transit in its 2025 projections. Transit via Ukraine had previously constituted nearly half of Russia’s pipeline gas exports to Europe.
While the Ukraine route is no longer operational, Russia continues to export gas through the TurkStream pipeline under the Black Sea, serving Turkey and Central European countries like Hungary and Serbia.
The European Union has intensified efforts to reduce its reliance on Russian energy, sourcing alternative supplies since the onset of the Ukraine conflict in 2022. Nations such as Slovakia and Austria, previously dependent on Russian gas via Ukraine, have secured alternative arrangements.
However, Moldova, a former Soviet republic, faces significant challenges, announcing measures to cut gas consumption by a third.
Gazprom stated via Telegram that it was “technically and legally unable to supply gas for transit through Ukraine” after January 1, 2025, citing Ukraine’s refusal to renew agreements. Ukrainian authorities confirmed the stoppage, citing national security concerns.
The end of the deal results in financial losses for both sides, with Ukraine losing approximately $800 million annually in transit fees and Gazprom forfeiting nearly $5 billion in gas sales.
Other major routes for Russian gas to Europe have also been disrupted. The Yamal-Europe pipeline via Belarus has ceased operations, and the Nord Stream route to Germany was destroyed in 2022. At its peak in 2018, Russia supplied a record 201 billion cubic meters of gas to Europe through various pipelines. By 2023, shipments via Ukraine had dwindled to 15 billion cubic meters, down from 65 billion cubic meters at the start of the last five-year contract in 2020.
