On January 1, 2025, Russia ceased its natural gas exports to Europe via Ukraine, concluding a transit arrangement that had been in place for several decades. The termination of this agreement, which expired on December 31, 2024, marks a significant shift in European energy dynamics.
The gas transit deal between Russia’s Gazprom and Ukraine’s Naftogaz, established in 2019, facilitated the flow of Russian gas to European nations through Ukrainian pipelines. Despite the ongoing conflict between Russia and Ukraine, this agreement remained operational until its expiration at the end of 2024. Ukrainian President Volodymyr Zelenskiy had considered conditional continuation of the transit; however, Russian President Vladimir Putin indicated that there was insufficient time to negotiate a new agreement.
The cessation of gas transit through Ukraine affects several European countries, notably Austria and Slovakia, which have historically relied on this route for their energy needs. Austria, for instance, has been predominantly dependent on Ukrainian transit for its gas imports. In response to the anticipated halt, these nations have been securing alternative energy sources, including liquefied natural gas (LNG) imports and gas from other pipelines, to mitigate potential disruptions.
The European Commission has expressed confidence that the shortfall can be compensated through these alternative sources. In recent years, the European Union has significantly reduced its reliance on Russian fossil fuels, a move accelerated by geopolitical tensions and the pursuit of energy diversification.
The end of the transit deal underscores the shifting geopolitical landscape and the ongoing realignment of energy supply chains in Europe. Russia’s influence over the European energy market has been diminishing, particularly following its invasion of Ukraine in 2022, which prompted the EU to seek alternative energy partners and sources. This strategic pivot aims to enhance energy security and reduce susceptibility to geopolitical pressures.
For Russia, the halt in gas transit through Ukraine signifies a further reduction in its gas exports to Europe, which have already seen a substantial decline. Gazprom’s supplies to Europe dropped from 63.8 billion cubic meters (bcm) in 2022 to 28.3 bcm in 2023, with projections indicating a potential fall to less than 14 bcm in 2024.
The conclusion of the Russia-Ukraine gas transit deal marks the end of an era in European energy supply. While it presents challenges, particularly for countries that have been dependent on this route, proactive measures and the diversification of energy sources are expected to mitigate significant disruptions. This development highlights the importance of energy independence and the ongoing efforts of European nations to adapt to an evolving geopolitical environment.
