Ukraine in maps: Tracking the war with Russia – BBC”>Ukraine Shuts Down Russian Gas Transit to Europe
Ukraine has officially closed its territory to Russian gas exports to Europe, marking the end of the Transit Deal. The Ukrainian Ministry of Energy announced this decision, stating that it was made in the interest of national security due to the ongoing conflict between Ukraine and Russia.
The gas transit route through Ukraine has been loss-making for companies involved, with Gazprom, the Russian gas giant, reporting a $6.9 billion loss in 2019, its first loss in over 20 years. Ukraine is now facing an annual loss of around $800 million from the terminated contract, while Gazprom stands to lose $5 billion in gas sales.
The closure of this transit route represents about 5% of Europe’s total gas imports, with Austria, Hungary, and Slovakia being the main recipients of Russian gas. Following the expiration of the deal, Europe now receives Russian gas via the TurkStream pipeline, which passes through Turkey, Bulgaria, Serbia, and Hungary.
Henning Gloystein, Head of Energy, Climate & Resources at Eurasia Group, stated that the end of the transit deal was "not surprising" but predicted a spike in spot market gas prices when trading resumes on Thursday.
"Europe’s gas infrastructure is sufficiently flexible to supply non-Russian gas to central and eastern Europe via alternative routes," Gloystein said. "This has been strengthened by significant new LNG import capacity since 2022."
Austria’s energy minister, Leonore Gewessler, confirmed that the country is prepared for this scenario and has been seeking new non-Russian suppliers. However, Slovakia’s prime minister, Robert Fico, warned that the halt in Russian gas supplies would have a "drastic" impact on Europe, driving up gas and electricity prices.
Before Russia’s full-scale invasion of Ukraine in 2022, Russia was the largest gas supplier to the European Union. Since then, the EU has reduced its gas imports from Russia by more than 40%, bringing its share down to around 8% in 2023.
