In 2019, Russia’s Gazprom signed a contract with Ukraine to transport gas to Europe via a Ukrainian pipeline. The contract expires next year, and the last supplies of Russian gas to Europe are likely to be completely cut off.
– We are preparing a system of supply cuts, said the Minister of Energy of Ukraine, German Galushenko FT.
Galushenko said he “couldn’t imagine” how it would work to extend the pact, and that Europe would have to prepare for supply cuts in the future.
The pipeline accounts for five percent of Europe’s total gas imports. About half of the gas consumed in Austria is supplied via the gas pipeline, while 95 percent of all gas used in Slovakia passes through Ukraine on its way from Russia, according to FT.
He was shot in the foot
Russian Deputy Foreign Minister Mikhail Galuzin stated that Ukraine would “shoot itself” by not extending the agreement, and that it would severely harm the EU. The European Commission has not responded to whether it will start talks with Russia on an extension.
Moscow has stopped supplies in the past, throwing energy markets into complete chaos. The price of natural gas has skyrocketed, and will be 10 times higher than the normal rate in 2022. At most, the price of gas has been at levels equivalent to the oil price of $600 a barrel, according to the Financial Times. Now levels are down again, 90 percent from the peak in August.
Without the pipeline through Ukraine, the only gas supplies from Russia to Europe would be a pipeline through Turkey. Gas sent through TurkStream represents 3 percent of European supplies.
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