Russia has ended its five-year gas transit deal with Ukraine to European customers, marking a significant shift in the global energy landscape. The agreement, which dated back to the Soviet era, had Russia earning an estimated $5 billion and Ukraine up to $1 billion annually.
The deal, which continued even during full-scale war in 2022, allowed Russian gas to flow through Ukrainian pipelines to westbound markets, with European countries paying Russia for the energy. However, Ukraine had signaled months ago that it planned to let the deal expire on January 1, 2025, and it has now made good on that pledge.
National security concerns were cited by Ukraine’s energy minister as the reason for ending the agreement. Russia’s gas conglomerate Gazprom confirmed that its energy flows through Ukraine have stopped, citing repeated refusal from Ukrainian authorities to extend the agreements.
The expiration of the deal highlights the complexities of the war and its impact on Europe’s energy dependence. European countries are struggling to reduce their reliance on Russian energy, with some nations having already cut ties with Russia’s gas giant Gazprom.
The loss of Ukraine as a key transit country will be felt by several nations, including Moldova, which relies heavily on Russian gas for its largest power plant. The EU has been actively diversifying its natural gas imports, with the US and Norway emerging as significant suppliers.
Source: https://www.businessinsider.com/russia-lost-weirdest-wartime-income-streams-gas-pipeline-ukraine-deal-2025-1