The halt of Russian gas exports via Soviet-era pipelines running through Ukraine marks the end of decades of Moscow’s dominance over Europe’s energy markets. On New Year’s Day, Russia’s gas firm Gazprom announced the suspension of supplies after Ukraine refused to renew a transit agreement.
Despite the stoppage, the European Union has prepared for this eventuality, ensuring that consumers won’t face the same price spikes experienced in 2022. Alternative supplies have been arranged, with Norway, the US, and Qatar increasing their share of Europe’s gas market.
Slovakia and Austria, the last remaining EU buyers of Russian gas via Ukraine, have secured alternative supplies. Hungary will continue to receive Russian gas through the TurkStream pipeline under the Black Sea. Meanwhile, Moldova’s breakaway region, Transdniestria, has suffered a disruption in heating and hot water supplies.
The European Commission has emphasized the flexibility of EU gas infrastructure, which has been reinforced with significant new LNG (liquefied natural gas) import capacities since 2022.
Ukraine has also begun to quadruple gas transmission tariffs for domestic consumers to offset the loss of $1 billion in annual transit fees from Russia, impacting the country’s industry by over $38 million annually. Gazprom is expected to lose nearly $5 billion in gas sales.
Slovakia’s main gas supplier, SPP, is supplying customers through pipelines from Germany and Hungary but at additional transit costs. The EU has made significant strides in reducing its dependence on Russian energy, securing more alternative gas supplies from other sources.
