The expiration of a crucial natural gas transit agreement between Russia and Ukraine at midnight on December 31, 2024, has reshaped Europe’s energy dynamics.
Ukrainian President Volodymyr Zelensky confirmed the deal, first signed in 2019, would not be renewed.
The decision underscores Ukraine’s effort to weaken Russia’s leverage over Europe, particularly as the agreement was established before Russia’s full-scale invasion of Ukraine in 2022 but after its 2014 annexation of Crimea.
The Urengoy-Pomary-Uzhhorod pipeline, a Soviet-era infrastructure, served as Russia’s last significant gas route to Europe following the Nord Stream sabotage and the cessation of Belarusian transit.
Its closure signals the end of an era and highlights a strategic pivot for both Ukraine and the European Union.
Economic and Strategic Implications
Western officials have long sought to reduce Europe’s reliance on Russian energy, a move they argue weakens Moscow’s ability to finance military operations and exert political pressure.
Experts estimate that the pipeline’s closure could cost Russia approximately $6.5 billion annually. However, Ukraine faces its own risks, with military analysts warning of potential Russian strikes on its remaining gas infrastructure.
European nations have had time to prepare for this transition. While Ukraine’s gas transit accounted for only 5% of Europe’s imports in 2023, the New York Times noted the closure could still disrupt the gas market.
Yet, Europe has significantly reduced its dependency on Russian energy, diversifying supplies and bolstering reserves.
Europe’s Shift Away from Russian Gas
In 2021, Russia supplied over 40% of the European Union’s gas imports. By 2024, that figure had fallen to under 15%. Norway has become Europe’s largest supplier, providing 30% of its gas in 2023, followed by the United States at 19%.
Liquefied natural gas (LNG) imports from Qatar and expanded LNG terminals, particularly in Germany, have further strengthened Europe’s energy resilience.
The European Commission reported that gas storage facilities were 95% full by October 2024, and demand had dropped by 18% compared to 2022 levels.
However, some Eastern European nations remain reliant on Russian energy, creating tensions. Slovakia, Hungary, and Austria still receive gas through the TurkStream pipeline via Bulgaria.
Regional Reactions and Tensions
Slovakian Prime Minister Robert Fico criticized Ukraine’s decision, warning of economic repercussions and threatening to halt electricity supplies to Ukraine.
Slovakia estimates losses of 150 million euros due to higher tariffs. Hungary has similarly condemned the decision, reflecting its historically sympathetic stance toward Russia.
In Moldova, the cessation of gas transit has exacerbated tensions in the breakaway region of Transnistria.
Local authorities have halted hot water and heating services, citing gas shortages. Moldovan security adviser Stanislav Secrieru accused Russia of provoking the crisis to destabilize the country.
Russia’s Response
Moscow has deflected blame, with Foreign Ministry spokeswoman Maria Zakharova accusing the U.S., EU, and Ukraine of orchestrating the transit’s termination.
Gazprom insisted it fulfilled its contractual obligations, warning the end of the pipeline would harm Europe’s economy and living standards.
As Europe adapts to its evolving energy landscape, the closure of Russian gas transit through Ukraine symbolizes a broader decoupling from Russian energy dominance, with long-term geopolitical and economic implications still unfolding.
