ISW analyzed whether the termination of gas transit through Ukraine will affect the Kremlin's income

ISW analyzed whether the termination of gas transit through Ukraine will affect the Kremlin's income Margarita Voloshina

Kyiv's decision not to extend the contract for the transportation of Russian gas through Ukraine after January 1, 2025, will likely significantly affect revenues from Russian gas,

Although the Kremlin claims otherwise. This was reported by 24 Channel with reference to the Institute for the Study of War (ISW).

How will the cessation of gas transit affect Russia

Moscow and Kyiv confirmed that Russian gas had stopped flowing through Ukrainian territory on the morning of January 1, propaganda media and Russian officials expressed confidence that the cessation of gas supplies through Ukraine would harm Europe, but not Russia.

“The loss of gas revenues is likely to negatively impact Russian state energy operator Gazprom, which has been struggling with declining revenues from European gas since 2022,” the report said.

Analysts cite a Bloomberg estimate that Gazprom will lose $6 billion in gas revenues per year due to the cessation of its transportation. The BBC Russian Service noted that Gazprom's main source of income in 2021 was Russia's then 45 percent share of the European gas market.

However, Russia now has only one route left for gas exports to Europe – the Turkish Stream pipeline, bypassing Ukraine. via the Black Sea to Turkey, while the aggressor country's gas accounts for only five percent of the European market.

The BBC notes that Slovakia and Austria, the final destinations of the blocked Russian gas via Ukraine, fully meet their energy needs through alternative sources.

The Kremlin's efforts to create confidence in the cessation of gas transit through Ukraine reflect its efforts to force Europe to allow the transit of Russian gas to Europe via the Nord Stream 2 gas pipeline in the winter of 2021-2022, as well as the Kremlin's updated position in the winter of 2024-2025, the analysts add.

It is noted that such actions by the Russian authorities are aimed at extracting economic or diplomatic concessions from Europe, undermining unity within the European Union, and creating tension between the US and the EU. Recall that Reuters reported that the EU had prepared for this by reducing its dependence on Russian gas through alternative supplies from Norway, Qatar and the US.