Ukraine Closure Of Gazprom Europe Pipeline Hurts Russia War Effort
(MENAFN- Asia Times)
Kyiv has finally turned off Russia's gas supply to Europe, ending a source of income that helped pay for Moscow's war against Ukraine. The decades-old deal, which allowed the transit of Natural gas produced by Russian energy giant gazprom through Ukraine, ended at midnight on December 31, shutting down Russia's last major gas corridor to Europe.
Europe's dependence on Russian energy had already shown a drastic reduction since the invasion in February 2022, so the gesture is mostly symbolic. But it doesn't make the decision less important or mean there are no consequences for the remaining Gazprom customers in Europe.
Russia will continue to supply some gas via the Turkstream pipeline across the Black Sea – mostly to Serbia and Hungary. But the loss of transit connections through Ukraine has dealt another major blow to Gazprom on top of the closure of the Yamal-Europe pipeline via Belarus and the cancelling of Nordstream 2 in 2022.
Gazprom posted its first operating loss since 1999 last year and is now set to lose another €5-6 billion. This will further reduce the company's tax contributions to the Russian budget.
Only a few years ago Russia supplied around 41% of the EU's energy needs. Today it only provides about 8%.
It has found new customers in Asia, but mostly for oil. Significant parts of its gas infrastructure are now dormant. And the reorientation of its gas export markets towards Asia is too slow and too costly to manage while it is waging war against Ukraine.
Weaning itself off Russian gas quickly – by finding new suppliers , especially of liquified natural gas (LNG), in the US and Norway – the EU has shown a surprising ability to muster the required political will and agility to see through the consequences.
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