At the beginning of the new year, on January 1, 2025, the gas transit contract between Russia and Ukraine officially expired, closing an important chapter in European energy history.
According to data from the Ukrainian Gas Transmission System, there were no requests for gas to be pumped from Russia through Ukraine on January 1 via the Sudzha station in the Kursk region. Requests for gas to be transported from Ukraine to Slovakia and Moldova were also zero. This means that neither the gas supplier (Russia's Gazprom) nor the buyer (European companies and traders) requested gas to be pumped through Ukraine on the first day of next year, TASS reported.
The development signals the end of the oldest gas supply route from Russia to Europe, and poses major energy challenges for the region.
Ukraine has refused to extend the contract signed in 2019, cutting Moscow’s revenue amid the conflict with Kiev. However, this will not only affect Russia but also Ukraine itself. Kiev will lose about $800 million in annual transit fees, while Russia’s Gazprom is expected to lose about $5 billion in revenue from the European market.
Slovak Prime Minister Robert Fico, who recently met with Russian President Vladimir Putin, warned that cutting off gas supplies could cost the EU up to €120 billion over the next two years. Fico said the move would not only push up gas prices but would also cost Slovakia an additional €177 million to use alternative routes.
The EU response has been flexible but not straightforward. The bloc has stepped up its search for alternative energy sources, including liquefied natural gas (LNG) from the US and Qatar, as well as supplies from Norway. Anna-Kaisa Itkonen, a spokeswoman for the European Commission, said the EU’s gas system is flexible enough to meet demand, thanks to new LNG import facilities that will be built from 2022.
However, gas prices have surged, reaching their highest level in more than a year. According to data from the ICE London exchange, February gas futures in the Netherlands rose more than 4% to $536 per 1,000 cubic meters.
In addition to the route through Ukraine, Russia has maintained gas supplies via the TurkStream pipeline under the Black Sea to Hungary and other Southeast European countries. This has helped maintain some energy ties with countries like Hungary and Slovakia, which have maintained close ties with the Kremlin despite the conflict.
However, most other routes, including Yamal-Europe via Belarus and Nord Stream across the Baltic Sea, have been disrupted. In particular, the destruction of Nord Stream in 2022 continues to symbolize the serious rift between Russia and the West.
The decision to halt gas transit through Ukraine has not only strained Kiev-Moscow relations but also caused discord within the EU. Ukrainian President Volodymyr Zelensky strongly criticized Prime Minister Fico for meeting President Putin, even threatening to cut off Slovakia's electricity supply during the winter.
On the other hand, the suspension of Russian gas flows through Ukraine has also complicated Europe’s energy crisis. Although the EU is better prepared than in previous years, it still faces price pressures and the risk of energy insecurity during the cold winter.
