Russian gas transit through Ukraine ends as contract expires

The five-year contract for the supply of Russian gas to the European Union via Ukraine officially ended on January 1, 2025, despite long-term agreements between Gazprom and several European buyers.

Gazprom confirmed that, as of 8:00 Moscow time on the first day of the new gas year in Europe, the contract with Naftogaz Ukrainy expired, leading to the termination of gas transit, Caliber.Az reports via Russian media.

Gazprom stated, “Due to the repeated and explicit refusal of the Ukrainian side to extend these agreements, Gazprom has been deprived of the technical and legal possibility to continue supplying gas for transit through Ukraine from January 1, 2025.” The company confirmed that gas supplies for transport through Ukraine had ceased since the start of the new gas day.

Ukraine’s Energy Ministry acknowledged the suspension of transit, calling it a "historic event" and stating that the decision was made "in the interests of national security." The Ukrainian government has long rejected the idea of renewing the gas transit contract with Moscow, with Russian President Vladimir Putin officially declaring the end of the deal during his annual press conference on December 19, 2024.

Although fewer European countries now receive Russian gas through Ukraine compared to early 2022, the volume involved is still substantial — around 15 billion cubic meters per year, representing roughly half of Russia’s total gas exports to Europe. At an average price of $400 per 1,000 cubic meters, this volume is valued at about $6 billion. Gazprom faces a challenge in quickly compensating for this loss without new routes for gas supplies to Central and South Asia or China.

Direct supplies through Ukraine have historically reached Slovakia and Moldova, with gas continuing from Slovakia to Austria, Hungary, Italy, and the Czech Republic. The termination of Ukrainian transit means these countries will need to explore alternative supply options, which could lead to higher costs.

Experts believe that Slovakia and Austria can survive for two to three months without Russian supplies due to their large underground gas storage reserves. Austria, which officially cancelled its contract with Gazprom in December 2024 after winning a legal dispute in a European court, continues to receive Russian gas through third-party traders. Italy and Germany may also provide limited gas flows to Austria.

Moldova faces the most significant challenge, as it heavily relied on Ukrainian transit for Russian gas. Although some gas could be redirected through the Turkish Stream pipeline, including up to 2 billion cubic meters for Moldova, Gazprom announced in December 2024 that it would halt gas supplies to Moldova due to unpaid debts by Moldovagaz.

For Ukraine, the loss of Russian gas transit means more than just a reduction in income — estimated at $700-800 million per year. Experts warn that without Russian gas, Ukraine's gas transport system and storage facilities will degrade, and the country will lose its strategic status as a key transit hub for European gas, diminishing its geopolitical importance.

By Tamilla Hasanova