Russia’s oldest gas route to Europe, which passed through Ukraine, was shut down in the early hours of New Year’s Day. The transit deal between Russia and Ukraine expired, marking another chapter in a decade of strained relations, which began with Russia’s seizure of Crimea in 2014.
Ukraine halted its purchase of Russian gas in 2015 and fully suspended gas flows in 2022 following the onset of the war. Ukrainian Energy Minister German Galushchenko stated, “We stopped the transit of Russian gas. This is a historic event. Russia is losing its markets, and it will suffer financial losses. Europe has already decided to abandon Russian gas.”
The halt in gas flows was anticipated due to the ongoing conflict, which began in February 2022. Ukraine has remained firm that it will not extend the deal amid military tensions.
According to industry sources, Gazprom had anticipated the absence of gas transit via Ukraine, which accounted for approximately half of Russia’s total pipeline gas exports to Europe.
Russia continues to export gas through the TurkStream pipeline under the Black Sea. TurkStream has two lines—one for the Turkish domestic market and the other supplying central European customers, including Hungary and Serbia.
The European Union has intensified efforts to reduce its dependence on Russian energy following the outbreak of conflict in Ukraine in 2022, seeking alternative sources.
Remaining buyers of Russian gas through Ukraine, such as Slovakia and Austria, have also arranged alternative supplies.
Moldova, once part of the Soviet Union, is one of the countries most affected. The country stated it will need to introduce measures to cut its gas consumption by a third.
There were no immediate comments from Europe in the early hours of Wednesday.
Gazprom confirmed that the five-year gas transit deal between Russia and Ukraine expired early on January 1.
“Due to the repeated and clearly expressed refusal of the Ukrainian side to renew these agreements, Gazprom was deprived of the technical and legal ability to supply gas for transit through the territory of Ukraine from January 1, 2025,” Gazprom said in a statement on Telegram.
“Starting from 08:00 Moscow time (0500 GMT), the supply of Russian gas for its transportation through the territory of Ukraine is not carried out.”
Ukraine’s energy ministry also stated that the transportation of Russian gas through Ukraine “has been stopped in the interests of national security.”
Ukraine now faces a loss of approximately $800 million annually in transit fees from Russia, while Gazprom will lose nearly $5 billion in gas sales.
Other Routes
Russia and the former Soviet Union spent decades building a significant share of the European gas market, which at its peak was about 35%, but the war has effectively dismantled Gazprom’s business.
The Yamal-Europe pipeline via Belarus has also been shut down, and the Nord Stream route across the Baltic Sea to Germany was blown up in 2022.
Collectively, these routes delivered a record high of 201 billion cubic meters (bcm) of gas to Europe in 2018. In 2023, Russia shipped only about 15 bcm of gas via Ukraine, a sharp decline from the 65 bcm in 2020 when the last five-year contract began.
