The supply of Russian gas to the European Union through the territory of Ukraine ceased after the completion of the five-year transit agreement, which became an important step in reducing the EU’s energy dependence on Russia. This decision opens up new opportunities for diversification of energy sources in Europe, but at the same time has serious geopolitical consequences. Ukraine, which has lost a significant source of revenue from transit, faces new challenges for its energy security and infrastructure. In response, the EU is actively increasing gas imports from Norway and other suppliers in an effort to strengthen its energy sustainability. However, the closure of one of the key transit routes creates difficulties for countries such as Moldova and increases political and economic tensions in the region, particularly with neighboring countries such as Slovakia. The current situation requires swift and coordinated action by Europe to ensure stability and energy independence.
The EU is becoming less dependent on Russian natural gas
The end of the agreement on gas transit through Ukraine had been expected for several years, so Europe had time to prepare. Due to access to alternative sources, no significant impact on prices is expected.
According to the European Commission, the volume of imports of Russian natural gas to the EU decreased by 71% between 2021 and 2023. Completion of the agreement on gas transit through the Ukrainian gas transport system will further reduce the volume of gas imports from Russia. At the same time, Norway will become the new leading supplier.
Our infographic shows the significant reduction of the EU’s dependence on Russian natural gas in recent years. In 2021, imports from Russia were 150 billion cubic meters, while in 2023 this figure fell to 43 billion cubic meters, representing a reduction of more than 70%. At the same time, there is a stable import of gas from other sources (in particular, from Norway, the USA and other suppliers).
Infographic: IA “FACT”
The EU pursues an active policy of diversifying energy supplies in response to geopolitical risks. The decline of Russia’s role as a key gas supplier to the EU is likely to have long-term consequences for global energy markets, and will also strengthen the role of other countries such as Norway.
Such a shift also demonstrates the effectiveness of sanctions and changes in energy policy that contribute to reducing Russia’s influence on the economy and security of the European Union.
The general trend of the last year shows a decrease in the import of pipeline gas and a simultaneous increase in the import of liquefied natural gas (LNG). In 2024, the import of Russian LNG to the EU reached a record level. As of mid-December, Europe imported 16.5 million tons of Russian LNG, which exceeds the figures for 2023 (15.18 million tons) and 2022 (15.21 million tons).
Norway becomes the leading supplier of natural gas
Norway has become the leading supplier of natural gas to the European Union thanks to several key factors. First, its geographical proximity to the EU and well-developed infrastructure, including the Europipe and Zeepipe pipelines, ensure efficient and safe transportation of natural gas to European countries. This allows Norway to quickly and reliably supply gas to the region.
Second, after the start of a full-scale Russian invasion of Ukraine in 2022, the EU made a strategic decision to reduce its dependence on Russian energy suppliers. As a stable democracy and reliable partner, Norway has become an alternative supplier for the EU, which has helped to diversify energy sources and reduce the risks associated with Russian supplies.
In addition, Norway has increased natural gas production, particularly at the Troll and Ormen Lange fields, to meet growing EU demand. This made it possible to compensate for the losses caused by the decrease in supplies from Russia and to ensure the stability of energy supplies.
Norway also has a good environmental reputation, meeting the EU’s high carbon footprint requirements. European countries prefer gas, the production of which meets environmental standards, which allows Norway to strengthen its position on the European energy market.
Increased demand for pipeline gas, which is cheaper and less energy-intensive to transport compared to liquefied natural gas (LNG), has also contributed to Norway’s growing role as a supplier.
An equally important factor is the political stability of Norway. Being a member of the European Economic Area (EEA), it has the opportunity to integrate into the European energy market, which facilitates cooperation and creates a legal basis for the further development of energy relations with the EU.
Consequently, Norway has used its geographic, economic and political advantage to strengthen its position as a leading supplier of gas to the EU, helping Europe reduce its dependence on Russian supplies and ensuring the region’s energy security.
Potential risks for Ukraine
Ukraine’s decision to stop the transit of Russian gas through its territory is a strong geopolitical step, but it also carries certain risks. According to the analysis of military experts cited by the American publication The New York Times, Russia may change its tactics regarding Ukrainian infrastructure. Experts do not exclude the escalation of attacks on pipelines. If earlier the Russian army mostly avoided targeted strikes on the Ukrainian gas transportation system, now the Kremlin has lost any economic incentives to preserve it. After all, it will have a strategic value for Russia as a tool for transporting energy carriers to Europe. What could be the consequences for the energy infrastructure of Ukraine in case of attacks? Attacks on the Ukrainian pipeline network can lead to significant losses not only in the economic sector, but also generally affect the energy stability of the region. Despite the suspension of transit, Ukraine continues to use the gas transport infrastructure for domestic needs. Its damage can make it difficult to provide energy to the population and industrial enterprises.
Transnistria has 10 days of gas left
Stopping the supply of Russian gas to Transnistria led to the shutdown of all industrial enterprises, with the exception of food production. This is reported The Guardian.
Transnistria, a separatist region of about 450,000 people that declared independence from Moldova after the collapse of the Soviet Union in the 1990s, has been hit hard by the cutoff of Russian gas to Central and Eastern Europe via Ukraine. As explained by Serhii Obolonik, the first deputy prime minister of Transnistria, all enterprises, except for those producing food products, stopped their activities. This ensures the food security of the region. Transnistria currently has only 10 days of gas reserves left.
Romanian edition Governance course reports that “the local power company cut off heating and hot water to households on Wednesday and urged families to stay warm by huddling in one room, covering windows with curtains or blankets and using electric heaters”.
Russia supplied about 2 billion cubic meters of gas to Transnistria every year, supplying the energy needs not only of that region, but also of a power plant that supplied electricity to all of Moldova, a country of 2.5 million people that aspires to become part of the EU.
Moldova has a long history of disputes with Russia over gas payments and strained relations with it. This post-Soviet country is trying to reduce its energy consumption by at least a third, while importing more than 60% of its energy needs from neighboring Romania.
Vadym Cheban, the head of the national gas company “Moldovagaz”, said that their company turned to the gas distribution company of Transnistria “Tiraspoltransgaz”, offering help in buying gas in European countries in order to reduce the gas shortage in the region. However, any gas entering the region will have to be paid for at market prices. As you know, according to an unofficial agreement with Moscow, Transnistria did not pay for the supply of gas from Russia’s Gazprom for several years.
Fico threatens Ukrainian refugees
Slovak Prime Minister Robert Fico said that the country may reduce financial aid for Ukrainian refugees due to the escalation of the dispute with Ukraine regarding the transit of Russian gas.
The decision to close the pipeline, which for many years supplied Russian natural gas to Central Europe, has serious consequences for Slovakia. As a major transit route, the country is now at risk of losing significant revenue from transit fees, which could have a significant impact on its economic situation.
The UN Refugee Agency reported that there are 130,530 Ukrainian refugees on the territory of Slovakia. A reduction in financial assistance for these refugees could have a serious impact on their living conditions in Slovakia.
