02nd January 2025 (9 Topics)
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Ukraine Ends Transit Of Russian Gas To EU
Context
Ukraine's gas transit agreement with Russia expired on January 1, 2025. Ukraine decided not to renew this agreement due to the ongoing war with Russia.
About the Agreement
- This agreement, signed in 2019, allowed Russia to send gas to European Union (EU) countries through Ukraine.
- The gas is sent through the Soviet-era Urengoy-Pomary-Uzhgorod pipeline from Siberia through Sudzha, a town in Russia’s Kursk region which is now under the Ukrainian military’s control.
- The gas moves via Ukraine into Slovakia.
- There, the pipeline splits into branches which take the supply to the Czech Republic and Austria.
- The pipeline passing through Ukraine was one of the last functional routes used to export Russian gas.
- Other pipelines were shut in the wake of the 2022 Ukraine war, including the Yamal-Europe pipeline through Belarus and the Nord Stream pipeline under the Baltic Sea which sent gas to Germany.
- Russia still uses the TurkStream pipeline on the bed of the Black Sea to export gas. The pipeline goes under the Black Sea to Turkey and then to other countries like Serbia, Bulgaria, and Hungary. However, it has limited capacity.
Impact on Russia and the EU:
- Loss of Market Share for Russia: Before the war, Russia supplied about 35% of Europe’s natural gas. This dropped dramatically after the war started and has now fallen to around 8%.
- The EU has reduced its dependence on Russian gas by sourcing more gas from countries like Norway, the US, and Qatar.
- Gas Prices and Availability: Gas prices in the EU spiked to record highs in 2022 after Russia’s supply was reduced. With Ukraine halting the transit of gas, gas supplies to the EU are now much smaller.
- Countries Most Affected:
- Austria and Slovakia are the most impacted by Ukraine’s decision because they receive a large portion of their Russian gas through Ukraine.
- Hungary remains mostly unaffected by the halt, as it receives Russian gas via the TurkStream pipeline under the Black Sea, not through Ukraine.
- Moldova, a small country near Ukraine, faces the most serious situation. It relies on Russian gas, and with Ukraine stopping its gas transit, Moldova is at risk of running out of gas.
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