'Historic Event': Ukraine Blocks Russia’s Oldest Natural Gas Supply Route To Europe As Transit Deal Expires

On New Year’s Day, Russian natural gas exports to Europe via Soviet-era pipelines running through Ukraine ceased as the transit deal expired, with no agreement reached between Moscow and Kyiv to continue the flows.

The stoppage ends a decade-long period of strained relations stemming from Russia’s annexation of Crimea in 2014. Ukraine had already stopped purchasing Russian gas in 2015. 

"We stopped the transit of Russian gas. This is a historic event. Russia is losing its markets, it will suffer financial losses. Europe has already decided to abandon Russian gas," Ukraine’s Energy Minister German Galushchenko stated.

The halt was anticipated due to the ongoing war, which began in February 2022. Ukraine declined to extend the agreement amid the conflict. The suspension will cost Ukraine an estimated $800 million annually in transit fees, while Gazprom faces losses of approximately $5 billion in gas sales.

Russia’s pipeline gas exports to Europe, which once accounted for 35 per cent of the European gas market, have been severely curtailed. 

Key routes like the Yamal-Europe pipeline via Belarus and Nord Stream to Germany have also ceased operations, with Nord Stream destroyed in 2022.

Russia now relies on the TurkStream pipeline, which supplies Turkey and parts of Central Europe, including Hungary and Serbia. 

However, volumes have plummeted. In 2023, Russia shipped just 15 billion cubic metres (bcm) of gas via Ukraine, a sharp decline from the 65 bcm recorded at the start of the previous five-year contract in 2020.

The cessation marks the collapse of a gas export network that once delivered a record-high 201 bcm to Europe in 2018, fundamentally reshaping energy geopolitics in the region.

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