Ukraine Halts Russian Gas Flow, Prompting Crisis in Eastern Europe
On January 1, 2025, Ukraine officially ceased all gas supplies through its pipeline network to Europe, marking a significant shift in the energy landscape following the expiration of its contract with Russian gas company Gazprom. Ukrainian Prime Minister Denys Shmyhal confirmed earlier that no new agreement would be established, leading to concerns across the region, particularly in Moldova, Slovakia, and Hungary.
Moldova, not an EU member, is experiencing immediate repercussions as it grapples with an energy crisis amid harsh winter conditions. The absence of gas from Ukraine has resulted in a lack of heating and hot water, with local authorities struggling to secure alternative supplies. Gazprom's offer to supply gas through different routes is contingent upon settling a disputed debt that Moldova refuses to acknowledge.
Slovakia and Hungary, while currently better positioned due to alternative energy routes, face uncertainty regarding their future gas supplies. Slovakia has estimated additional costs of nearly €180 million for 2025 to secure gas through alternative pipelines linking to Germany. Hungary plans to increase its imports of Russian gas via Turkey, which remains an essential route following the shutdown of the Ukrainian pipeline.
In an effort to stabilize the situation, the International Energy Agency has encouraged European nations to assist Moldova, emphasizing the need for support amid growing divisions in the region regarding energy policy.
Despite the challenges, experts indicate that Europe is unlikely to face a severe gas supply crisis, as the flow of gas through Ukraine has been declining over recent years, contributing to less than 5% of the continent's gas needs. Nevertheless, recent developments have raised concerns about rising gas prices amid a global market affected by the situation.
Moldova