Payam Javan: Russian natural gas exports to Europe via Soviet-era pipelines running through Ukraine were halted on New Year’s Day as a five-year transit agreement expired without renewal. The stoppage, attributed to the ongoing war and Ukraine’s refusal to extend the deal, marks the end of a route that once accounted for half of Russia’s pipeline gas exports to Europe. Gazprom announced that it could no longer legally or technically continue gas flows through Ukraine, citing the expiration of the agreement. Ukraine’s energy ministry supported the decision, framing it as a matter of national security. This disruption underscores a broader decline in Russian gas exports to Europe, which have been significantly curtailed by the war and Europe’s pivot away from dependence on Russian energy since 2022.

The cessation affects both parties economically, with Ukraine losing an estimated $800 million annually in transit fees and Gazprom facing a $5 billion hit in sales. Meanwhile, Russia continues to export gas via the TurkStream pipeline to Turkey and parts of Central Europe. The broader European effort to diversify energy sources has further diminished Russia’s dominance in the market, which once held a 35% share. Moldova, heavily reliant on Russian gas, is among the most affected, planning to reduce gas consumption by a third. Other major routes, including Yamal-Europe and Nord Stream, have also ceased operations, reflecting a sharp decline in Russian gas deliveries from a peak of 201 billion cubic meters in 2018 to 15 billion in 2023 through Ukraine.

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