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Ukraine Halts Russian Gas Transit After 55 Years; Gas Prices Surge to €50

Dec 31, 2024, 02:40 PM

Europe is bracing for potential energy disruptions as Russian gas flows through Ukraine are set to halt on January 1, following the expiration of a key transit agreement that Ukraine has decided not to renew after 55 years. Slovak Prime Minister Robert Fico criticized Ukrainian President Volodymyr Zelensky for unilaterally stopping the gas transit, calling the decision "irrational and self-destructive." Fico wrote a letter to the heads of the European Commission and the European Council, urging the EU to address the issue and warning that the halt would harm Europe more than Russia, with EU losses potentially 30 times greater than Russia's. Zelensky accused Fico of opening a "second energy front" against Ukraine on Vladimir Putin's orders, allegations that Slovakia dismissed as "nonsense." Moldova faces a looming energy crisis, with Gazprom set to halt gas supplies to the country starting January 1, cutting off 80% of its electricity supply. European natural gas prices have risen to €50 per megawatt-hour—the highest level in over a year and double the prices since February—amid fears of supply disruptions and colder winter weather. European Commission spokesperson Anna-Kaisa Itkonen stated that the EU is prepared for the cessation of Russian gas transit via Ukraine, noting that the impact would be limited due to flexible infrastructure and alternative supply routes.