Russian state gas company Gazprom announced early on January 1 that it has suspended gas supplies to Europe through a key pipeline crossing Ukraine, following Kyiv's refusal to renew a transit agreement signed before Russia's invasion in 2022.

The announcement, made via Gazprom's official Telegram channel, comes after years of European efforts to reduce dependency on Russian gas, mitigating potential immediate impacts for most European nations. Countries like Slovakia, Hungary, Austria, and several in the Balkans still rely on Russian gas, albeit in reduced quantities, transported through Ukraine.

However, Moldova faces significant challenges due to its dependency on Russian gas for a major power plant in the breakaway region of Transdniestr. With the transit contract expired, the plant, operated by Tirasteploenergo, has begun shutting down, leading to the cessation of central heating and hot water supplies to all but hospitals in the region. The impact on electricity supply to the rest of Moldova remains uncertain.

"We have stopped the transit of Russian gas, it's a historical event," Ukraine's Energy Minister stated, noting that Russia would suffer financial losses as a result. The pipeline, a relic of the Soviet era, was the last significant route for Russian gas into Europe, especially after the Nord Stream pipeline's destruction in late 2022 and the suspension of another route through Belarus to Poland due to the ongoing conflict.

Russia's share of EU gas supply has significantly dropped from nearly half to much less following the geopolitical tensions. European nations have shifted towards alternative suppliers like the US, Qatar, and Norway, alongside increasing their capacities for liquified natural gas (LNG).

Austria's Energy Ministry confirmed that its gas supply remains secure due to strategic purchases and storage. Slovakia, despite its Prime Minister Robert Fico's recent visit to Moscow, will not face shortages, though at an additional cost of 177 million euros. Fico predicted a "drastic" impact on EU countries but not on Russia from this stoppage.

Hungary and other countries have alternative routes via the TurkStream pipeline across the Black Sea. The suspension of gas transit through Ukraine will cost Kyiv around $800 million annually in fees, while Gazprom will lose nearly $5 billion in sales.

The European Commission's Anna-Kaisa Itkonen emphasized the flexibility of Europe's gas infrastructure, now reinforced with new LNG import capacities since 2022, to supply non-Russian gas to Central and Eastern Europe.

This development comes amidst heightened tensions, with Ukrainian President Volodymyr Zelenskiy accusing Fico of following Kremlin directives, particularly after Fico's meeting with Russian President Vladimir Putin, where threats were made to cut off Ukraine's emergency power supplies during winter. (ILKHA)