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Headline: Ukraine Halts Russian Gas Transit, Cites Unwillingness to Fund War
Ukrainian gas transit through its territory has halted, with the country reiterating its refusal to extend the current contract set to expire in late 2024. The move, a stark warning from Ukraine, signals its dissatisfaction with potential energy earnings being used to fuel the ongoing conflict. "We will not finance Russia‘s war," a senior Ukrainian official asserted.
Natural gas prices have surged to an unprecedented high, marking a 51-euro increase per megawatt-hour since October 2023. Industry experts predict that while pipeline reserves may temporarily offset the supply gap, 2025 could see a notable surge in demand for liquefied natural gas (LNG) to boost inventories.
However, the viability of LNG as a substitute is/questions remains limited, impeded by insufficient infrastructure for its transportation and considerably higher costs.
Ukrainian President Volodymyr Zelensky hailed the halt in gas transit as a significant setback for Russia, stating, "When [Vladimir] Putin consolidated power 25 years ago, Russia’s gas transit through Ukraine was over 130 billion cubic meters. Today, it’s zero. That’s a significant loss for Moscow."
Viewing the energy sector as a tool for coercion, Zelensky argued that Europe has largely adapted to Russia’s halted gas supply. He emphasized the need to support Moldova, which remains reliant on Russian gas, in its energy transition.
Notwithstanding the challenges ahead, Zelensky expressed confidence in the US and other allies to stabilize global gas prices, stating, "Together, we can make energy markets fairer and more predictable."
