European energy market reports and price indices

Ukraine Halts Russian Gas Transit to Europe; Prices Hit €51/MWh Amid Supply Concerns

Jan 2, 2025, 08:40 AM

Ukraine has halted the transit of Russian natural gas through its territory to Europe as of January 1, following the expiration of its contract with Gazprom, ending a decades-long arrangement that once transported over 130 billion cubic meters annually. The European Commission stated that the suspension was anticipated and that the European Union had prepared with alternative routes and liquefied natural gas (LNG) providers. European gas prices rose by 4.3% to almost €51 per megawatt-hour, the highest level since October 2023, as markets reacted to the loss of supply and colder winter temperatures. Moldova, affected by the halt, is seeking electricity imports from Romania and Ukraine due to heating outages in regions like Transnistria. Russian Foreign Ministry spokeswoman Maria Zakharova blamed the United States, Ukraine, and European governments for the disruption, stating that it weakens Europe's economic potential. Turkey may emerge as the 'only safe alternative' route for gas supplies to Europe, increasing its strategic importance in the region.