Russian gas finally stopped flowing through Ukraine on New Year’s Day, further reducing Moscow’s share of Europe’s gas supply nearly three years after it invaded its neighbour.
Despite the war, gas had kept flowing from Russia via Soviet-era pipes in Ukraine under a five-year transit agreement between the two countries. That expired at the end of the year, bringing exports to a halt.
One consequence is that Moldova, an EU candidate country on Ukraine’s south-western border, has been cut off from Russian gas. Gazprom, Russia’s state-run gas company, alleged that Moldova had failed to meet payment obligations, which the government denied.
Gazprom also announced that it would stop supplying gas to Moldova and its pro-Russian breakaway region, Transnistria. The Russian firm cited Moldova’s failure to meet payment obligations, which the Moldovan government denies.
“Russia has been using a classical energy blackmail strategy on Moldova that had been tried and tested in the former Soviet republics in the past several decades,” Agnia Grigas, a senior fellow at the Atlantic Council, told The Parliament. “They allow energy debt to pile up and then squeeze them asking for political concessions or a green light to purchase strategic assets.”
Olga Rosca, a top adviser to Moldovan President Maia Sandu, accused Russia of trying to undermine the country’s EU-leaning administration ahead of an election this year. “This is not an energy crisis but a security crisis,” she said. Kaja Kallas, the EU’s top diplomat, similarly accused Russia of weaponising gas and waging hybrid war in Moldova.
The importance of Russian gas to Moldova is largely tied to a power plant in Transnistria, a breakaway Russian-speaking region that typically supplies 80% of the country’s electricity. Since supplies were cut, it has been forced to buy electricity – as well as gas – from neighbouring Romania, which is significantly more expensive.
“Moldova will have to make difficult and expensive choices in the near term if it hopes to have a future as a sovereign state and one allied with Europe,” Grigas said.
Moldovan Prime Minister Dorin Recean said EU funds could help subsidise energy bills for businesses and households. The €1.8 billion aid package tying the EU candidate country to economic reforms and alignment with other EU legislation could be a source of support.
“The EU should continue to provide the financial and technical support the country needs,” Szymon Kardaś, senior policy fellow at the European Council of Foreign Relations, told The Parliament. “It will determine the fate of Moldova and its future in the EU.”
Pressure on Transnistria
Ironically, it’s Transnistria, the semi-autonomous, pro-Russian region in the east of Moldova, that is likely to bear the brunt of the gas outage. Transnistria split from Moldova and fought a separatist war in the early 1990s. In 2012, Russia issued a decree recognising Moldova’s sovereignty over the region, but revoked it in 2023. A small force of Russian soldiers has been stationed there in a so-called peacekeeping capacity since the end of the independence war in 1992.
After Russia’s invasion of Ukraine in 2022, the rest of Moldova began sourcing gas from Romania. Transnistria, however, continued to import roughly 2 billion cubic metres of Russian gas each year – largely free of charge.
As a result, the region now faces a huge gap in its energy supply, leaving its 450,000 residents struggling to heat their homes and power local industries amid freezing winter temperatures. That’s likely to lead to a political battle for influence over the region, with Moldova and Russia each blaming the other for turning out the lights.
Vadim Krasnoselsky, the leader of Transnistria, has described the situation as “difficult,” placing the blame squarely on Moldova’s government for failing to reach an agreement with Gazprom. He travelled to Moscow last week in an attempt to secure new gas supplies.
Meanwhile the head of Moldova’s national gas company, Vadim Ceban, said he had offered to help Transnistria buy gas from other European countries.
Thus far, Transnistrian officials have been wary of seeking help from the country they claim independence from. Doing so would also mean paying normal market rates, in contrast to the steep discounts offered by Russia. The European Commission has urged authorities in Transnistria to accept offers of alternative energy supplies.
Transnistria is already grappling with a sharp decline in trade with Moscow, which fell 45% last year. Meanwhile, its trade with the EU grew 12%, with Romania as Transnistria’s key partner, representing over 14.6% of its total trade.
“This proves a big political problem for Russia, which claims to protect Russians abroad,” said ECFR’s Kardaś. Authorities in Transnistria are counting on Russian gas deliveries resuming via an alternative route. “But Gazprom has tied the payment of the debt by Moldova as a prerequisite. Until then the Transnistrian people will be left on their own,” he explained.
Russia has the capacity to supply gas to Transnistria via pipelines under the Black Sea through Turkey but has chosen not to, citing higher costs. Kremlin spokesman Dmitry Peskov blamed Ukraine and Moldova for “depriving” Transnistria of natural gas, while noting that some European countries, like Slovakia, still favour Russia’s “competitive” supplies.
Gas still flowing
The closure of the Ukraine route follows the cessation of exports through the Nord Stream undersea pipeline in 2022, but has still not entirely ceased Russian gas exports to Europe. Around 5% of Europe’s gas still flows through the Balkan Stream, which transports gas from Russia via Turkey to Central Europe.
While many European countries moved to reduce their dependency on Russian gas following the invasion of Ukraine, others clung on: Slovakia, Hungary and Austria were still drawing 65% of their gas from Russia in 2023. They are among the EU members that have remained friendliest to the Kremlin since the invasion.
Slovakian Prime Minister Robert Fico has accused Ukraine of “sabotage” for refusing to extend its gas transit agreement with Russia and has hinted at retaliatory measures, including cutting electricity exports to Ukraine. Fico recently travelled to Brussels to complain about the impact on his country.
“Prime Minister Fico’s false statements that this will affect the EU and Slovakia are mostly to cover for the incoming high energy bills and the loss of transit income of forwarding Russian gas,” said Kardaś.
Before the Russian invasion, Moscow supplied almost 40% of the EU’s piped natural gas. Cutting it off sparked an energy crisis and worsened inflation in the bloc. With this further reduction of Russian exports in the middle of winter, the EU’s gas reserves are depleting at the fastest rate in seven years.
“The last two winters have been litmus tests for the EU, proving that European states can do without Russian gas,” said Grigas. “Most central and eastern states have dramatically reduced their dependency on Russian gas by switching to Norwegian, American and North African suppliers.”
Ukraine’s President Volodymyr Zelenskyy called the end of gas transit through Ukraine to Europe “one of Moscow’s biggest defeats.” He said it was Europe’s “joint task” to support Moldova “in this period of energy transformation.”