Ukraine's power play: Russia's gas has nowhere to go
World in 10
Deep Dive
Why did Ukraine stop transporting Russian gas to Europe?
Ukraine ended its deal to transport Russian gas through its pipelines to Europe on New Year's Day, a move seen as damaging to Russia and its allies. This decision was part of Ukraine's broader strategy to reduce Russian influence and leverage in the region.
What are the immediate impacts of Ukraine's decision on Central European countries?
Countries like Hungary, Austria, and Slovakia are directly affected. Hungary and Austria have alternative routes for gas, but Slovakia, heavily reliant on the Ukrainian pipeline, faces significant challenges and even threatened to cut off electricity exports to Ukraine in retaliation.
How does the end of the gas transit deal affect Moldova and Transnistria?
Moldova has largely weaned itself off Russian gas, but the semi-separate region of Transnistria, under Russian military occupation, relies heavily on it. Gazprom cut off gas to Transnistria on January 1st, causing local unrest and potential electricity shortages as the region switches to coal, which has limited reserves.
What are the long-term implications for Russia's gas exports?
Russia's gas revenues are in a long-term decline, with Gazprom struggling to export surplus gas. The end of the Ukrainian transit route further diminishes Putin's energy leverage over Europe, leaving only southern routes through Turkey. China's hesitation on a second Siberian pipeline exacerbates Russia's export challenges.
Will the end of the Ukrainian gas transit route cause significant price hikes in Europe?
The European gas market is less tight than in 2022, with more spare capacity in global LNG markets. While some price increases are possible, they are unlikely to match the dramatic hikes seen at the start of the full-scale invasion of Ukraine.
How does this situation affect the EU's relationship with the incoming Trump administration?
Some EU member states, particularly Germany, are considering bundling European LNG imports from the US as a strategy to avert tariffs from the Trump presidency. Increased need for LNG imports could strengthen this approach.
Shownotes Transcript