Russian Gas to Europe Halted, Turkey Offers to Boost Supply Amid Gazprom's $5 Billion Loss

Jan 6, 2025, 08:50 AM

Russian gas deliveries to Europe via Ukraine have ceased following the expiration of a transit agreement, marking the end of a long-standing supply route. The halt in gas flows through the Urengoy–Pomary–Uzhhorod pipeline occurred after Ukraine declined to extend the deal, including a proposed gas swap between Russia and Azerbaijan. This development has led to a significant loss for Russia's Gazprom, estimated at around $5 billion annually, which represents nearly 5% of its 2024 federal revenues from oil and gas sales. Ukraine is also facing financial repercussions, with an anticipated loss of approximately $800 million per year in transit fees. The cessation of Russian gas supplies through Ukraine has raised concerns about energy security in Europe, particularly in countries like Hungary and Slovakia, which were major recipients of the gas. In response to the situation, Turkey's Energy and Natural Resources Minister Alparslan Bayraktar has indicated that Turkey is prepared to increase its gas supply to Europe, potentially exporting up to 10 billion cubic meters annually via the Balkan Pipeline to Central and Eastern Europe. Concurrently, Europe is experiencing a rapid depletion of its gas reserves, with storage levels dropping at the fastest rate since 2018 due to colder weather conditions, putting further pressure on the region's energy supply.