Ukraine ends Russian gas pipeline to Europe - but how much will it cost Moscow?
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Russia will no longer transport gas to Europe via Ukraine’s pipelines, further limiting its ability to raise capital. As of January 1 2025, Russian gas is no longer flowing into Europe via Ukraine’s pipeline. A five-year deal between Gazprom, the Russian state energy company, and Ukraine expired at 5am GMT Wednesday morning.
![[Russian President Vladimir Putin (L) and Indian Defence Minister Rajnath Singh shake hands. Russia is India’s top destination for for crude oil imports.]](https://static.independent.co.uk/2024/12/11/10/11768661.jpg)
The deal had allowed for Russian gas to travel through Ukraine’s pipeline networks into European countries, primarily Hungary, Slovakia and Austria. Ukraine refused to renew the gas transit deal, which has existed in some form since 1991, with President Volodymyr Zelensky saying that Russia would not be allowed to “earn billions on our blood”.
The move will not cut off all Russian gas to Europe, but significantly reduce it. Gas can still travel from Russia to Europe via the TurkStream pipeline, but no longer through Ukraine, cutting gas imports to the EU by around 14 billion cubic meters. The European Commission has said that this volume can be replaced by liquefied natural gas (LNG) and pipeline imports from other sources, such as Norway and the United States.
Though Ukraine benefitted financially from the agreement, to the tune of $800m (£640m) a year, the gas was not imported to Ukraine itself. Latest estimates show that Russia is expected to lose around €5 billion (£4.14 billion) a year from gas transported to Europe via Ukraine.
According to its own reports Gazprom’s market capitalisation stands at around £22 billion (3 trillion roubles). Gazprom is Russia’s largest company, and has the largest gas reserves in the world. Since the invasion of Ukraine its business has taken several blows.
