The gas pipeline through Ukraine is used by Russia to transport about 50% of its total pipeline gas exports to Europe, including Türkiye, and about 10% of Moscow's total gas exports.
Ukraine's political goal is to cut off as much economic relations with Russia as possible and limit Russian gas revenues.
However, according to the Moscow Times, economically, Ukraine does not benefit from stopping the pipeline, although Kiev's losses are smaller than those of EU countries.
First, Ukraine loses annual transit fees from Russia, which will amount to about $800 million by 2023.
Second, Ukraine's gas production and consumption sites are not always conveniently located, so Russian "actual gas" is sent to some regions of the country via a transit pipeline network, gas analyst Sergei Vakulenko noted. The gas is not purchased directly from Russian gas giant Gazprom, but from European traders.
However, Kiev will need to overhaul its pipeline system, and these problems could worsen as Ukraine's economy recovers and requires more energy.
What about Russia?
Losing the Ukrainian route could cost Gazprom 15% of its revenue.
Russia appears to have accepted the loss of the European market for pipeline gas. Instead, it wants to use more gas for domestic consumption, increase pipeline gas exports to Central Asia and China, and invest in liquefied natural gas (LNG), which can be transported by LNG tanker and is therefore less dependent on onshore infrastructure.
Could all of this have been prevented?
In theory, yes.
Both Russia and EU gas importers have publicly supported continued transit of Russian gas via Ukraine, with talks reportedly ongoing with Azerbaijan to find workable solutions.
One plan analysts have discussed could involve maintaining Ukrainian transit through a swap deal between Moscow and Baku.
In practice, this means that Azerbaijan will pay Ukraine's transit fees and supply gas to Europe, but the actual Russian gas will still go through the Ukrainian pipeline system.
In return, Russia would receive money for selling the same amount of Azerbaijani gas elsewhere, such as to Türkiye or even to domestic consumers.
But this deal is complicated.
First, Russia may not want to sell Azerbaijani gas at a price much lower than it sells its own gas to Europe.
Second, Azerbaijan may not be able to export enough gas to match Russia's transit through Ukraine due to bottlenecks, according to a report by the Energy Policy Center at Columbia University.
Third, there are reputational risks for the EU and Ukraine, which have set out to end their dependence on Russian gas.
