Ukraine stopped the supply of Russian gas to Europe. This is who is most at risk

Ukraine stopped supplying Russian gas to a number of European countries on New Year’s Day, ending Moscow’s decades of dominance in Europe’s energy markets.

Russian state-owned energy giant Gazprom. confirmed Gas exports to Europe via Ukraine stopped at around 8am local time (5am London time) on Wednesday.

The widely-anticipated move marks the end of a five-year transit agreement between Russia and Ukraine, with neither side willing to strike a new deal amid the war continues.

Ukrainian President Volodymyr Zelensky said last month that Kyiv was not ready to continue the transit of Russian gas, adding: “We will not give the opportunity to earn additional billions on our blood.”

Russia, which has been transporting gas to Europe through Ukrainian pipelines since 1991, says that EU countries will suffer the most from the change in supplies. Moscow can still send gas through the Turkish Stream pipeline, which connects Russia to Hungary, Serbia and Turkey.

According to the data, due to the stop Ukraine will lose up to $1 billion annually in transit from Russia Reuterswhile “Gazprom” may lose about 5 billion dollars from the sale of gas.

The European Commission, the executive body of the EU, said he worked with EU member states most affected by the end of the gas transit agreement to ensure the entire 27-nation bloc was prepared for such a scenario.

SlovakiaAustria and Moldova are among the countries most at risk of being stopped. According to data, in 2023 they were the most dependent on Russian gas transit volumes in Europe Rystad EnergySlovakia imported approximately 3.2 billion cubic meters that year, Austria received 5.7 billion cubic meters, and Moldova 2 billion cubic meters.

Austria insisted it was well prepared for the stoppage, but others were far more worried.

Slovak Prime Minister Robert Fico warned that Ukraine’s termination of the gas transit agreement will have “sharp” impact on the EU without harming Russia. Fico also threatened to cut off electricity supplies to neighboring Ukraine.

Prime Minister, a vocal critic on EU support to Ukraine in the ongoing war, made an unexpected visit to Moscow for talks with Russian President Vladimir Putin shortly before Christmas.

Moldova, which is not a member of the EU, declared A 60-day state of emergency last month over energy security concerns.

A total of 56 lawmakers in Moldova’s 101-seat parliament voted in favor of a nationwide state of emergency, which the government says will allow the country to implement a series of measures to prevent and mitigate the threat of energy shortages.

Minister of Energy of Ukraine Herman Halushchenko described the cessation of Russian gas flows through Ukraine as a “historical event”.

“Russia is losing markets, it will suffer financial losses,” Galushchenko said on Telegram on January 1, according to Google.

“Europe has already decided to give up Russian gas. And a European initiative Restoration of EU power implies exactly what Ukraine did today,” he added.

Separately, the Minister of Foreign Affairs of Poland, Radek Sikorski welcomed the development as a political victory, accusing Russia’s Putin of trying to “blackmail Eastern Europe by threatening to cut off gas supplies.”

The latest data is compiled by industry group Gas Infrastructure Europe shows EU gas storages are approximately 73% full. In Germany, Europe’s largest economy and the largest consumer of gas, reserves are currently almost 80%.

“Without Azerbaijan or another third party to transit the gas after the exchange agreement with Russia, the EU would need about 7.2 (bcm) of gas to be extracted from the LNG market,” said Christoph Halser, a gas and LNG analyst. Rystad Energy. says the research note.

“Terminals in Poland, Germany, Lithuania and Italy could forward these volumes to the most affected countries such as Slovakia and Austria.”

Henning Glostein, group head of energy, climate and resources at Eurasia Group, said Ukraine’s decision to cut Russian gas supplies to the EU was not a surprise, given that both Kyiv and Moscow have long said they do not want to renew the agreement. in modern conditions of war.

In an analytical note, Glostein said the expiration of the agreement did not threaten the EU’s energy security in winter, citing steps taken by EU importers to prepare for supply cuts and mild winter weather seen in much of Europe.

Eurasia Group’s Glostein said that changes in gas prices in the coming months will likely depend on political developments in the Russian-Ukrainian war and the persistence of winter weather conditions.

“On the political front, talks are ongoing between some EU members (such as Slovakia, where many Ukrainian pipelines enter the EU), Russia and Ukraine to find a compromise that could allow some resumption of supplies. However, there was no progress during the negotiations at the end of the year,” Glostein said.

“On the weather side, temperatures are expected to be above average for the remainder of the winter in Europe, meaning the impact of the cuts will be limited,” he added.

The price of gas in the Dutch TTF center, which is the European benchmark for natural gas trading, rose by 1.2% in the last month to 49.49 euros ($51.1) per megawatt-hour, according to data Thursday. New York Intercontinental Exchange.