Russian gas supplies through Ukraine fell to a minimum: experts outlined the prospects

Should Europe be concerned?

Since the beginning of 2023, the transit of Russian gas to Europe via Ukrainian pipelines has almost halved. This is not surprising: deliveries go through the only available channel saved by Kyiv – through the Sudzha measuring station. Apparently, the countries of the Old World in the current heating season managed to do without the Russian Federation: EU members have accumulated enough energy resources to survive short-term frosts. But it is unlikely that this successful practice will be extended: the purchased raw materials will not be enough for a long time, and bills for housing and communal services in European cities reach record values.

Ukraine has lost the status of the main transit country through which European consumers are provided with Russian energy resources. According to the official representative of Gazprom, Sergey Kupriyanov, since January, the transit of Russian “blue fuel” to the countries of the Old World through the pipeline system of a neighboring state has fallen by 44%. If during the past year daily deliveries amounted to approximately 40-42 million cubic meters, now the volume confirmed by Kyiv barely exceeds 24 million cubic meters.

The gas pipeline connecting Russian hydrocarbon fields with European energy consumers has long been a bone of contention in economic relations between Moscow and Kyiv. Our country was interested in the amount of “blue fuel” passing through the territory of Nezalezhnaya and illegally appropriated by Kyiv. Ukrainians counted how much they were underpaid by Gazprom for using the transport system. The bottom line was this: Russia had the raw materials needed to heat the inhabitants of the Old World, and Ukraine could provide pipes through which gas could be supplied. Every year Kyiv needed less and less fuel: the country’s economy fell into ruin and became more dependent on European partners. Russia built bypass fuel routes across the Baltic Sea – the Nord Stream pipeline complex – in order not to continue to pay for the transportation of raw materials.

The final disputes after several European arbitration proceedings were settled in December 2019, when the parties entered into a five-year agreement for the transit of Russian hydrocarbons through Ukraine: 40 billion cubic meters annually in 2021-2024. The contract was violated immediately on the day of its conclusion, when the United States imposed sanctions on the contractors of Nord Stream 2, which was fully completed but never put into operation. After a series of explosions, Nord Stream 1 was shut off from work, and last May, Ukrainians stopped pumping Russian raw materials through another large channel, the Sohranivka GIS, referring to the fact that this station is located on the territory of the LPR and the facility cannot be controlled by Kyiv forces. There was an application for pumping through the Sudzha station, which until the beginning of this year was at the level of 40-42 million cubic meters per day.

The resumption of Russian gas supplies through the Ukrainian pipeline system in the coming years is hardly expected in principle, says BitRiver financial analyst Vladislav Antonov. Renewal of long-term agreements in any form between Moscow and Kyiv is not yet possible, and it is also pointless to hope for help from the Europeans in this matter. For many, it remains a mystery how the remaining two tens of millions of cubic meters are currently being transited, if the political relations of the countries are heating up on an almost daily basis.

However, Europe is not yet particularly worried about its fuel supply. Stocks of “blue fuel”, accumulated by the countries of the continent last autumn, continue to remain at a high level, draws the attention of the head of the analytical department of AMarkets Artem Deev. At the same time, the cost of gas quotations is falling – no more than $600 is offered per thousand cubic meters.

Nevertheless, it is not necessary to say that the inhabitants of the Old World successfully survived the next heating season: the majority of EU citizens faced a sharp rise in the cost of housing and communal services – the most unlucky accounts in “fat” increased by 30-40%. The cost of electricity for households ended up rising in more than 20 EU Member States.

Meanwhile, European countries may no longer be able to repeat last year’s success and stock up on sufficient energy resources in advance. According to Patrick Pouyanne, CEO of the French oil and gas company TotalEnergies, the situation on the European gas market may become more complicated this year, as the volumes spent during the winter will have to be replenished without the usual supplies from Russia. “Europe will have to import liquefied fuels in bulk, so the situation will become tense again,” the manager warns.