Ukraine says it has halted the transport of Russian gas to Europe through its territory, after a five-year transit deal expired Wednesday, January 1.
The closure of one of Russia’s oldest gas routes to the European Union was expected and comes as Moscow’s war in Ukraine soon enters its fourth year. Ukraine’s energy ministry said it ended the deal “in the interests of national security.”
“We have stopped the transit of Russian gas. This is a historic event,” the ministry said in a statement, adding that its gas transportation infrastructure had been prepared in advance of the expiration.
Since Russian president, Vladimir Putin’s ordered invasion of Ukraine began in February 2022, the European Union has sought to diversify its energy supplies and reduce its dependence on Russia. Imports of pipeline gas to the European Union from Russia have drastically diminished, dropping from over 40% in 2021 to about 8% in 2023, according to the European Council.
Following the closure of the route through Ukraine, Russia will have just one more way to deliver gas via pipeline to Europe: the TurkStream pipeline that runs through Turkey to Bulgaria.
Last year, Russian owned gas giant Gazprom, which signed the transit deal with Ukraine’s Naftogaz in 2019, recorded a $6.9 billion loss, its first in more than 20 years, due to diminished sales to Europe, Reuters reported. That’s despite its efforts to boost exports to new buyer China.
Ukraine now faces the loss of about $800 million a year in transit fees from Russia, while Gazprom will lose close to $5 billion in gas sales, according to the Reuters.
Reuters also stated in its report that several European countries still purchasing Russian gas, such as Slovakia and Austria, have arranged alternative supply routes.