Europe has only a year and a half left to tolerate Russian gas

Alexey Gromov, Principal Director on Energy studies of the Institute for Energy and Finance, commented to the business newspaper "Vzglyad" on Ukraine's refusal to negotiate with Russia on the extension of gas transit after December 2024.

"Ukraine has been doing without physical supplies of Russian gas for its own needs for a long time. The only loss for Ukraine is the loss of money from the transit of Russian gas," Alexey Gromov says.

"Compared to 2021, when up to 40 billion cubic meters of gas per year were guaranteed to be pumped through Ukraine, the situation is different now. We pump at most 15-18 billion cubic meters per year along the northern branch of the transit. Therefore, Ukraine's revenues from Russian gas transit have already significantly decreased," the expert notes. Pumping has been reduced due to Ukraine's refusal last year to accept gas at one of the two gas compressor stations.

At the same time, Ukraine expects to compensate for the loss of revenue for its budget through the use of Ukrainian gas storage facilities for the needs of the EU, which is already happening this year, the analyst adds. Ukrainian gas storage facilities are conveniently located along the western border, and in Europe itself, storage facilities are already filled by almost 90% unusually early. Therefore, the Europeans have the opportunity to pump more gas than they want to use. Firstly, prices are likely to rise in winter. Secondly, after the warm winter of 2022-2023, the upcoming winter may turn out to be cold. Therefore, it is better to stock up for the future.

"Russia used to supply 140 billion cubic meters of pipeline gas to Europe alone, but last year it supplied only 76 billion cubic meters, that is, half as much. And Europe coped, albeit with heavy losses. This year, Russia will supply no more than 25 billion cubic meters of gas, taking into account the loading of the Turkish Stream and Ukrainian transit. And even in such conditions, Europe will cope, no one will freeze in winter," the expert says.

"Thus, a catastrophic scenario when people will freeze in their homes, there will be power outages, will no longer happen. But, of course, you can see how the European economy has suffered a lot," Gromov says.