Russia to lose $6.5B annually after EU abandons Russian gas – expert’s opinion

The European Union’s readiness to live without Russian gas and suspend its supply towards the EU are very beneficial to Ukraine, as the aggressor state will lose USD 6.5 billion annually in budget revenues in this case.

The relevant statement was made by Mikhail Krutikhin, an oil and gas market expert, in a commentary to Ukrinform, following the corresponding remarks by European Commissioner for Energy Kadri Simson.

“Halting the supply of Russian gas to the EU is very beneficial to Ukraine, because Russia used to receive about USD 6.5 billion annually for the gas shipped towards Europe via Ukraine. Now, Russia’s military budget will not have these funds. It is a big win, as Ukraine will lose only USD 230 million received for transit operations. This is much less than the profit from depriving Russia of such funds,” Krutikhin told.

He mentioned that the EU had previously decided that all Member States should completely abandon Russian pipeline gas by 2027. Hence, it is a positive fact that all Member States can do without Russian gas as soon as this winter season.

“The few countries that still get it are Hungary (through TurkStream), and Austria and Slovakia (which have been receiving gas through Ukraine so far). If the supply of Russian gas through these pipeline routes is disrupted, they will be able to supply themselves with gas from European trading platforms. Yes, in this case they will have to pay a little more, as there is competition. But, this is the fault of the leadership of these countries,” Krutikhin noted.

According to the expert, the fault of the leadership of the above countries lies in the fact that, despite being warned in advance and taking into account hostilities on the territory of Ukraine, they did not properly prepare for the withdrawal from Russian gas.

“Despite the European Union’s decisions, they did not provide themselves with reliable alternative routes. But, anyways, now they will be able to live without Russian gas, even though they will experience certain inconveniences. Most importantly, there is enough gas in Europe, and there is no shortage, as rightly stated by Kadri Simson,” Krutikhin concluded.

A reminder that European Commissioner for Energy Kadri Simson stated earlier that the European gas storages were at 95% of capacity, which would help to keep prices stable and prevent shortages.

From January 1, 2025, Russian gas transit operations through Ukraine’s territory will be fully halted, and the European Union is ready for it.