Russian Gas Transit via Ukraine to Halt January 1; European Gas Prices Surge

Dec 31, 2024, 03:07 PM

Russia is set to halt gas supplies to Europe via Ukraine starting January 1, 2025, as the current transit agreement between the two countries expires. Gazprom has reduced gas flows through Ukraine to 37.2 million cubic meters from 42.4 million cubic meters on the last day of the agreement. Ukraine increased transit tariffs four-fold, contributing to the cessation of the gas flow. European gas prices have risen to over €50 per megawatt-hour, or $536 per 1,000 cubic meters, the highest in more than a year, and have doubled since February amid concerns over winter energy supplies. The European Union, with spokesperson Anna-Kaisa Itkonen, has stated it is prepared for the end of Russian gas transit through Ukraine, despite Slovakia seeking continued transit. Moldova fears a looming energy shortage as Russia halts gas supplies, with the country heavily reliant on gas and electricity from the breakaway region of Transnistria. Ukraine confirmed it will not extend the transit agreement, ending nearly 55 years of Russian gas supplies through its territory to Europe.