Oil stains on the exterior of a freight wagon in Riga, Latvia, on Thursday, Feb. 2, 2023. Over the weekend, the European Union and Group of Seven countries will implement sanctions on Russian refined fuel exports. Photographer: Andrey Rudakov/Bloomberg via Getty Images
(EPICSTORIAN) – Russia’s gas transit to Europe through Ukraine ceased on New Year’s Day, according to both Moscow and Kyiv, marking the end of a decades-long arrangement and becoming the latest casualty of their ongoing conflict.
Russia ceased its gas transit to Europe through Ukraine, ending mutually beneficial years of arrangement that had seen Russian natural gas travel through Ukrainian pipelines to Western Europe since the Soviet Union’s collapse in 1991.
The end of the agreement follows the expiration of the last transit contract on Wednesday. Ukraine, in response to Russia’s invasion in 2022, chose not to renew the deal, which had historically provided Moscow with revenue from gas exports and Kyiv with substantial transit fees.
Ukraine Welcomed End of Russia’s Gas Agreement With Europe
Kyiv hailed the termination of the gas deal as a “historic event,” with officials asserting that it would have significant financial repercussions for Russia, striking a blow at its war funding.
Ukrainian officials emphasized that Russia’s loss of transit revenues would further weaken its military capabilities and hinder its ongoing war efforts. “This marks a turning point in the energy war,” one Ukrainian official declared. “We are dealing a direct financial blow to Russia’s war machine.”
Meanwhile, Moscow framed the end of the arrangement as a self-inflicted wound by Ukraine, warning that it would have negative consequences for Eastern European countries that depend on Russian gas supplies.
Russian officials criticized Kyiv for choosing to disrupt a long-standing agreement that benefited both sides, particularly when many countries in Eastern Europe still rely heavily on Russian energy.
Despite the termination of the transit deal, Russia remains a major player in the European energy market. Moscow has shifted focus to alternative routes for transporting gas, including the Nord Stream pipelines under the Baltic Sea, as well as newer routes to Turkey and the southern Balkans.
The loss of Ukrainian transit, however, complicates Moscow’s energy strategy, especially as European countries seek alternatives to Russian gas amid the ongoing conflict.
Impact on Eastern Europe
The disruption of gas transit has raised concerns in countries like Hungary, Slovakia, and Poland, which have been major recipients of Russian gas via Ukraine.
These nations now face potential supply disruptions, forcing them to seek alternative energy sources. Hungarian Prime Minister Viktor Orbán expressed his dismay at the termination of the deal, emphasizing that it would likely increase energy prices for countries reliant on Russian gas.
While the end of gas transit through Ukraine is seen as a significant diplomatic victory for Kyiv, it also underscores the deepening energy divide between Russia and Europe. In the years leading up to the war, Europe had already begun diversifying its energy imports in response to growing geopolitical tensions. However, the abrupt cessation of Russian gas deliveries through Ukraine is a clear indication of the far-reaching consequences of the ongoing war.
Looking Forward
Kyiv is already focusing on securing energy alternatives, while Moscow looks to expand its energy routes through other countries.
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However, the cessation of gas supplies is taken-telling of the broader geopolitical shift between Russia and Europe that might have significant implications for energy markets and regional stability.
