Early this Wednesday, the Russian gas company Gazprom interrupted the supply of natural gas through Ukraine to the expire their five-year transit agreements signed in 2020. The confirmation of the scenario that has been suspected for some time represents a dramatic milestone insofar as this route has been key for European supply in the last five decades.
“Due to the repeated and explicit refusal of the Ukrainian side to extend these agreements, Gazprom was deprived of the technical and legal opportunity to supply gas for transit through the territory of Ukraine from January 1, 2025,” he said. the company assured in a statement.
The closure of the gas transit route to Europe also puts an end to a decade of critical relationships caused by Russia’s seizure of Crimea in 2014.
Following the outbreak of war in Ukraine in 2022, the European Union redoubled its efforts to reduce its dependence on the Russian energy apparatus by seeking alternative sources and contracts with other countries such as Qatar and the United States that have helped the community bloc keep prices stable despite the disconnection with Russia.
However, Gazprom has also suffered the cutting of gas purchases by European countries. In the last year, the Russian state company has recorded losses of more than 7,000 million dollars (6,727 million euros), the first time it has signed red numbers since 1999 and this despite the company’s efforts to try to compensate for this. fall in exports to the west thanks to China.
“Europe’s gas infrastructure is flexible enough to supply gas of non-Russian origin to Central and Eastern Europe via alternative routes. It has been reinforced with significant new import capacities for liquefied natural gas from 2022,” the spokesperson said. of the European Commission Anna-Kaisa Itkonen.
Impact on the market
Despite the stoppage of flows, no substantial impacts are expected on the European energy market due to the disconnection with Russia. The gas market maintains stable prices around 48.50 euros per megawatt hour.
However, despite the EU’s progress in replacing Russian supply through Ukraine, Europe has felt the impact in the form of higher energy costs that have affected the competitiveness of the community industry, especially German versus to the United States and China.
Besides, Ukraine will also feel the effects of this disconnection energy as it faces the loss of about $800 million a year in transit fees from Russia, while Gazprom will lose nearly $5 billion in gas sales.
Moldova, one of the countries most affected by this contract, states that it will have to take measures to reduce its gas consumption by a third.
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