As of January 1, 2025, Russia’s dominance over Europe’s gas supply ended after Ukraine decided not to renew its gas transit contract. Gazprom, Russia’s state-owned energy company, confirmed that the gas flow stopped at 0500 GMT.
Despite the stoppage, consumer prices in the European Union will remain unaffected. The European Commission has confirmed that preparations have been made, with the EU now relying on alternative supply sources and reinforced LNG import capacities established since 2022.
Slovakia and Austria, previously reliant on the Ukraine pipeline, have secured alternative supplies, while Hungary now receives Russian gas through the TurkStream pipeline under the Black Sea. However, Transdniestria, a breakaway region of Moldova, is severely affected and is now facing harsh cold weather.
Ukrainian President Volodymyr Zelenskiy declared the halt in gas transit as “one of Moscow’s biggest defeats” and called on the US to assist in supplying gas to Europe to help overcome its energy dependence on Russia.
Russia and the former Soviet Union dominated the European gas market for five decades, peaking at a 35% share. In 2018, Russia delivered a record 201 billion cubic meters (bcm) of gas to Europe, but this dominance has now ended.
Since the start of the war in Ukraine, the EU has reduced its reliance on Russian gas by turning to suppliers like Norway, Qatar, and the United States. Furthermore, The Nord Stream pipeline to Germany was destroyed in 2022, and the Yamal-Europe pipeline via Belarus has been shut down.
Finally, as of 2025, in addition to losing its contract with Ukraine, Russia’s gas deliveries to Austria have dropped drastically to just 7 gigawatt hours (GWh) per day, a significant reduction from 200 GWh per day last year.
Although Ukraine stands to lose $1 billion annually in transit fees from Russia, it plans to recover some of the losses by quadrupling gas transmission tariffs for domestic consumers. This could potentially cost the country’s industry over 1.6 billion hryvnias ($38.2 million) a year. Meanwhile, Gazprom is set to lose approximately $5 billion in gas sales revenue.
