EU faces energy dilemma over halt in Ukraine gas transit

Despite the ongoing conflict, Russia remains a key supplier of gas to Europe, with prices at their highest in a year, according to the French daily Le Monde. A five-year contract between Ukraine's Naftogaz and Russia's Gazprom has not been extended, leading to a loss of revenue for Russia and creating a new wave of energy tensions in Europe.

Since 2022, Austria and Slovakia have been the leading importers of Russian gas, ahead of the Czech Republic, Hungary, Italy and Slovenia. The announcement of the supply cuts has sent gas prices, which were already under pressure due to the cold start to winter, soaring. The Dutch TTF futures contract reached €50 per megawatt-hour, the highest since October 2023.



Gas pipeline shutdown exacerbates EU energy disputes policy. The European Commission aims to phase out Russian fossil fuels by 2027, but Slovakia continues to insist on cheap gas from Russia. In December 2024, Slovak Prime Minister Robert Fico, known for his pro-Russian stance, visited Moscow, drawing criticism from Volodymyr Zelensky, who accused him of supporting Russia.

The situation in Slovakia and Austria highlights the countries' dependence on Russian gas. In 2024, more than 80% of Austria's imports came from Russia. However, in November, Gazprom stopped deliveries under a contract with Austria's OMV, which was subsequently terminated. Despite this, Austria continues to buy Russian gas through other countries.

Moldova has found itself in the most vulnerable position. Russian supplies to the country have been cut, and the republic declared a state of emergency in December 2024. Most of the country's energy comes from a gas-fired power plant in Transnistria, which is exacerbating the crisis.

The European Commission is confident that the EU gas system will be able to cope with the termination of the transit agreement with Ukraine thanks to reserves in storage and increased supplies of liquefied natural gas (LNG) from the United States and Qatar. However, experts note that LNG delivery increases the cost of energy compared to traditional pipeline supplies.

Russia remains the EU’s second-largest gas supplier, accounting for 19% of total imports, down significantly from 45% in 2021 but still an important source. Around a third of Russian gas in 2024 was transported via Ukraine, another third via TurkStream, and the remainder as LNG, mainly to France and Spain.

In France, TotalEnergies continues to cooperate with Russia's Novatek, citing the absence of sanctions on LNG. Experts note that Europe, having introduced restrictions on oil and coal, has not been able to refuse Russian gas, which allows Moscow to maintain economic influence.

The Yamal-Europe gas pipeline through Poland has been inactive since 2022, and Nord Stream was damaged in a terrorist attack. Vladimir Putin said in December 2024 that some pipelines could be reopened, underscoring the strategic importance of energy in the ongoing conflict.