Ukraine has officially blocked the flow of Russian gas to Europe after its key transit agreement with Moscow has expired, an act taken by Kiev for reasons of national security, marking one of the turning points in its conflict with Moscow.
Ukrainian officials called it a "historic event," while President Volodymyr Zelensky termed it "one of Moscow's greatest defeats," emphasizing the weaponization of energy by Russia against its neighbors. With the agreement now expired, European nations need to adapt to losing a supply line that supplied some 5% of the total gas imports to the EU.
CNN explained that this would mean that the end of the transit deal between Ukraine and Russia would have Europe relying more heavily on alternative sources of energy. Countries like Austria, Hungary, and Slovakia were receiving Russian gas through Ukraine but have since managed to make alternative supply routes.
Experts do not expect a huge energy shortage; however, the disruption will surely cause a spiking in gas prices. The shutdown might make it more difficult to restock gas reserves ahead of winter next year, pushing prices higher," said experts who said Europe diversified its energy sources by importing more liquefied natural gas.
While the cut may disrupt Europe's supplies, Europe was prepared for the end of the agreement. The European Union had prepared for this eventuality for more than a year, strengthening its infrastructure with new LNG import capacities. Other countries, such as Austria and Slovakia, had even secured alternative gas suppliers that made the move towards Russia less painful.
Increased imports of LNG have helped ease the strain from the loss of some Russian imports, but countries like Slovakia are now bracing for higher energy costs.
What does this mean for Russia?
In a way, the deal ending is bad for Russia, according to CNBC, as it also faces hardship because of the halt in supplying gas. Already, the country has suffered losses by reduced sales of gas to Europe. The state-owned gas giant of Russia, Gazprom, has posted a first loss in over 20 years. The loss of Ukraine's transit route is a hit on Russia's energy sector as it looks elsewhere for clients such as China.
Europe will then, in a race to stay energetic, work to maintain energy security and stabilizing gas prices at the end of the crisis period. Even analysts predict that though prices mightn't surge terribly, they stand higher than during the pre-crisis days. The EU intends to decrease dependency on Russian energy by 2027; for this purpose alone.
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