Russian natural gas exports through Soviet-era pipelines running via Ukraine to Europe were halted early on New Year’s Day as the transit agreement between the two nations expired. Moscow and Kyiv failed to reach a new deal amid the ongoing war.
The shutdown ends a decade of strained relations over energy flows, worsened by Russia’s annexation of Crimea in 2014. Ukraine stopped purchasing Russian gas the following year.
Ukraine’s Energy Minister German Galushchenko hailed the stoppage as a “historic event,” saying, “Russia is losing its markets, it will suffer financial losses. Europe has already made the decision to abandon Russian gas.”
The stoppage, while expected amid the military conflict, underscores Ukraine’s refusal to extend the deal. The five-year gas transit agreement expired at midnight on 1 January.
In a statement on the Telegram messaging app, Russian energy giant Gazprom blamed Ukraine for the termination, saying, “Due to the repeated and clearly expressed refusal of the Ukrainian side to renew these agreements, Gazprom was deprived of the technical and legal ability to supply gas for transit through the territory of Ukraine from January 1, 2025.” It confirmed that as of 08:00 Moscow time (0500 GMT), “the supply of Russian gas for its transportation through the territory of Ukraine is not carried out.”
Ukraine’s energy ministry cited national security concerns as the reason for ending Russian gas transit, but the move comes at a cost. Kyiv now faces a loss of $800 million annually in transit fees, while Gazprom is estimated to lose close to $5 billion in gas sales.
Russia’s TurkStream pipeline, which runs under the Black Sea, remains operational, supplying Turkey and central European customers, including Hungary and Serbia.
The European Union has made significant strides in reducing its reliance on Russian energy since the outbreak of the conflict in February 2022. Member states have turned to alternative suppliers, and previous buyers of Russian gas via Ukraine, such as Slovakia and Austria, have already secured alternative arrangements.
Moldova, however, has been severely affected, with authorities announcing measures to reduce gas consumption by a third.
The halt in gas transit marks the end of a significant chapter in Europe’s energy landscape, a route that once accounted for nearly half of Russia’s total pipeline gas exports to Europe. While there was no immediate comment from European officials, the event underscores the broader shift away from Russian energy in the region.
Oil prices, meanwhile, are projected to hover near $70 a barrel in 2025, reflecting ongoing market adjustments amid geopolitical tensions.
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