On New Year’s Day, Russia ended gas exports through Soviet-era pipelines running through Ukraine, in the most dramatic change yet in the energy landscape of Europe. The halt, expected for months, came after Ukraine refused to renew a transit agreement with Russian gas giant Gazprom. This marks the end of decades of Russian dominance over European energy markets.
The stoppage will not affect EU consumer prices, unlike in 2022, when reduced Russian gas flows led to soaring energy prices, exacerbating the cost-of-living crisis. Despite the cutoff, the EU has diversified its energy sources, replacing Russian gas with supplies from Norway, Qatar, and the United States.
Slovakia and Austria, the last EU countries still receiving Russian gas through Ukraine, have already secured alternative supplies. Hungary will continue getting Russian gas through the TurkStream pipeline under the Black Sea.
Transdniestria, another Russian-backed breakaway region of Moldova, is also in trouble due to a gas stoppage, halting heating and hot water supplies, with the authorities asking locals to use electric heaters and other sources of warmth.
The European Commission assured that the EU had prepared for the disruption, with new infrastructure to handle non-Russian gas supplies. Because of this preparation, the energy markets in the bloc remain stable despite the stopping of Russian gas.
The cut-off will have major financial consequences for both Russia and Ukraine. Ukraine, which will lose up to $1 billion in transit fees, plans to offset this loss by increasing domestic gas tariffs. Gazprom, meanwhile, faces a significant revenue loss, estimated at nearly $5 billion.
The end of Russian gas exports via Ukraine marks the climax of a move away from Russian energy dominance in Europe, and Ukraine’s energy minister said the event was historic.
