BAKU, Azerbaijan, October 6. The future of Russian gas transit through Ukraine remains highly uncertain, according to the latest outlook from the International Energy Agency (IEA), as both the transit and interconnector agreements between Russia and Ukraine are set to expire at the end of 2024, Trend reports.
While Russian gas transited via Ukraine accounted for only a small share of the EU's total gas demand in 2023, the potential halt of these flows could have significant repercussions for Central and Eastern European markets, particularly Austria, Hungary, Slovakia, and Moldova.
Under a five-year contract signed between Gazprom and Naftogaz Ukrainy in 2019, gas volumes transited via Ukraine have plummeted from 90 bcm in 2019 to less than 15 bcm in 2023. According to the IEA, last year alone, Russian gas flows through Ukraine dropped by 28%, with only 12.8 bcm reaching the European Union and 1.8 bcm going to Moldova.
While Russian gas via Ukraine made up less than 4% of the EU's total gas demand in 2023, it was critical for some countries, covering around 65% of the combined gas needs of Austria, Hungary, and Slovakia. However, Hungary has effectively reduced its reliance on this route in 2024, further complicating the situation.
The Ukrainian gas transmission operator has publicly stated it will not renew the interconnector agreement with Gazprom, according to the IEA outlook, which increases the likelihood that gas transit through Ukraine will stop in January 2025. This would lead to the loss of about 6 bcm of gas supply to the EU in the first quarter of 2025, necessitating higher European LNG imports to compensate. Such a shift could intensify competition with Asian markets for flexible LNG cargoes, tightening global gas market conditions.
While Austria, Hungary, and Slovakia are unlikely to face immediate supply risks due to their strong storage capacity and midstream connectivity, Moldova's vulnerability is much greater. Close cooperation between Moldova and international partners will be essential to ensure its energy security through the 2024/25 winter.
The situation remains fluid, with geopolitical negotiations potentially influencing the final outcome, but the clock is ticking as the region braces for what could be a critical winter for energy supply, according to the IEA's outlook.