A turning point for gas transit through Ukraine

With the expiry of the transit agreement on 31 December, Europe faces the possibility that billions of cubic metres of gas supplies could be abruptly halted. Without a last-minute agreement, there is a risk of a significant disruption in supply, which could have far-reaching consequences for both Ukraine and certain European countries.

Ukraine is under massive pressure from Slovakian Prime Minister Robert Fico and Central and Eastern European companies to maintain gas flows from the Russian border to the EU. Countries such as Hungary and Slovakia continue to rely on gas from Gazprom, which runs counter to the EU's efforts to diversify its energy sources.

Tensions and diplomatic challenges

The negotiations are progressing under increasing tension. Ukrainian President Volodymyr Zelenskyi recently accused Fico of striking "shadow deals" with Russian President Vladimir Putin, while Fico threatened to stop electricity supplies to Ukraine in return. Zelenskyi has also emphasised that Ukraine is not prepared to continue transporting Russian gas through its pipelines, as this would finance Moscow's war machine.

At the same time, a complete halt to transit could jeopardise Ukraine's extensive pipeline infrastructure. Without gas flows, the system could become the target of Russian attacks, which would pose technical challenges for Ukraine's energy supply in winter.

Political and economic pressure

A transit stop would increase Europe's dependence on alternative gas sources, but would also increase the geopolitical pressure on Ukraine. According to diplomats, Zelenskyi could be forced to allow gas transit to continue in order to guarantee the security of Ukraine's infrastructure. At the same time, possible agreements with non-Russian suppliers could serve as a compromise.

On the other hand, both Russia and Slovakia are seeking to continue gas supplies in order to avoid additional transit costs and secure direct revenues from European purchases. However, the European Commission has withdrawn from the negotiations and emphasised that there are sufficient alternative sources to secure supplies. At the same time, European energy companies are seeking new partnerships, including talks with Azerbaijan about possible gas supplies.

What is at stake?

An end to Russian gas transit through Ukraine would increase the cost to the EU by an estimated 120 billion euros over the next two years, Mr Fico warned.

While the EU continues to work towards its goal of moving away from Russian energy, gas transit through Ukraine remains a sensitive issue. A complete halt would not only exacerbate geopolitical tensions, but also jeopardise the credibility of the EU's strategy to diversify its energy sources.