Ukraine has followed through on its decision to stop transporting Russian gas to Europe after a crucial deal with Moscow expired on Wednesday.
The move, which was anticipated but still significant, comes after nearly three years of full-scale conflict with Russia and as Europe has significantly reduced its reliance on Russian gas imports. Ukraine’s energy ministry cited national security concerns as the reason for ending the agreement, describing the cessation as a “historic event.”
The deal, signed in 2019 between Russia’s Gazprom and Ukraine’s Naftogaz, had been critical for Russian gas exports to Europe. Last year, Gazprom reported its first loss in over 20 years, totaling $6.9 billion, largely due to reduced European sales, even as it attempted to increase exports to China.
Ukraine now stands to lose around $800 million annually in transit fees, while Gazprom is expected to lose nearly $5 billion in gas sales. However, many European countries that still buy Russian gas have already secured alternative supply routes. The expired agreement accounted for about 5% of the EU’s gas imports, primarily serving Austria, Hungary, and Slovakia. With the expiration of this deal, Europe now receives Russian pipeline gas via the Turkstream pipeline, which runs through Turkey to Bulgaria, Serbia, and Hungary.
Prior to Russia’s invasion of Ukraine in 2022, Russia was the EU’s largest natural gas supplier, providing over 40% of its pipeline gas. By 2023, this share had shrunk to around 8%, with Europe filling the gap by importing substantial amounts of liquefied natural gas (LNG) from the U.S. and other nations, as well as pipeline gas from Norway. The EU has also continued to import Russian LNG, but it has set a target to completely phase out all Russian fossil fuels by 2027.