The Final Countdown: Will Russia and Ukraine Renew Gas Transit Deal?

Extending the transport of Russian gas via Ukraine after 2024 would likely benefit both Russia and Ukraine. Stopping the flow of gas, on the other hand, would be painful for whichever side initiates it.

At the end of 2024, a five-year agreement expires governing one of the oldest and biggest economic links between Russia and Europe: the transit of Russian gas through the territory of Ukraine. Kyiv has already said it will not extend the agreement, and Russian officials have confirmed no negotiations to that end are under way with either Ukraine or the EU. Still, that’s not to say that no more Russian gas will ever be shipped via Ukraine.

After all the upheaval of the last two years of war, Russian gas now enters Europe via two routes, each of which carries about 14 billion cubic meters of gas per year. The first is via the TurkStream pipeline and its extension, Balkan Stream, under the Black Sea to Turkey, Bulgaria, Serbia, and Hungary. The second route is a corridor through Ukraine to Slovakia.

The main buyers of Russian gas are Slovakia, Hungary, Austria, and Italy, whose current governments are guided by pragmatism in their foreign policy. Russian gas prices are now much more closely linked to European exchange prices than they were in the last decade, but still work out cheaper than liquefied natural gas (LNG), especially during price surges. Accordingly, some countries are reluctant to stop buying Russian gas entirely, though they have all signed up to the REPowerEU program, which envisages that Russian gas will be fully phased out by 2027.

Ukraine has already said it will not renew the transit agreement with Russia when it expires at the end of this year.