Russia’s state energy giant Gazprom has stopped gas transit through Ukraine to Europe, marking the end of over 40 years of uninterrupted supply. The halt, announced on January 1, 2025, comes as European countries face an ongoing energy crisis driven by Russia’s invasion of Ukraine.
The loss for Russia is estimated at around $6 billion annually in export revenue, while Ukraine will forfeit hundreds of millions of dollars in revenue from its gas transit infrastructure. Europe will need to turn to more expensive gas and increasingly rely on liquefied natural gas (LNG) as underground storage facilities are depleted at record rates.
European countries, particularly those that relied heavily on Russian gas, face significant price increases. Prices for monthly futures at the TTF hub rose 3.7% to 50.7 euros ($52.2) per megawatt-hour, reaching their highest levels since fall 2023. Slovakia’s largest energy company estimated an additional $92.7 million in expenses due to new import sources.
The halt has sparked concerns about energy instability and the impact on European economies. The European Commission had set a goal to eliminate all fossil fuel imports from Russia by 2027. With Gazprom still supplying gas to Serbia and Hungary via the TurkStream pipeline, but unable to fully offset losses, Europe faces significant challenges in its transition away from Russian energy sources.
The loss of Ukraine’s transit route marks a symbolic end to an era in the Soviet-built gas-pipeline network that once brought Siberian gas to Europe. As experts warn of rising gas prices for households and industries in 2025, the world watches as Russia and Europe navigate this new reality.
Source: https://meduza.io/en/feature/2025/01/03/breaking-the-chain