Ukraine ‘punishing’ EU – Putin

Ukraine is punishing the EU by refusing to extend a transit deal for the supply of Russian natural gas to the bloc, Russian President Vladimir Putin said on Thursday. Kiev’s decision will result in higher energy prices for European consumers, he warned.

The contract between Moscow and Kiev that brings pipeline gas to the EU expires on December 31. The Ukrainian leadership has repeatedly warned that it has no plans to prolong the deal, despite pleas from some EU member states. The flow of gas via the transit network will be halted on January 1, Ukrainian Prime Minister Denis Shmigal has said.

Speaking to journalists on Thursday, Putin said that Kiev is “biting Europe’s hand because without European support Ukraine cannot even exist, let alone fight.” 

“Well, now they [Ukrainians] are punishing Europe by ending the contract for the supply of our gas…”

European gas prices have risen to $500 per thousand cubic meters and will continue to surge when the transit deal expires, the Russian president warned, noting “we are not provoking this, it is their policy.”

Russia has always advocated “depoliticization of economic issues” and has not interfered with gas supplies to the EU, Putin pointed out.

He added that Russia still maintains transit of gas via Ukraine. “We supplied regularly and paid, and continue pay, by the way, money for transit,” he pointed out.

Moscow is ready to supply gas via Ukraine under a contract with any counterparty, but it’s impossible to reach a deal in three or four days, Putin said.

The five-year transit agreement between Russian energy giant Gazprom and Ukrainian state energy firm Naftogaz was signed in 2019. The deal entailed Gazprom transiting 65 billion cubic meters (bcm) of gas through Ukraine in 2020 and 40 bcm annually between 2021 and 2024.

Gazprom, once the EU’s main gas provider, dramatically reduced its exports to the bloc in 2022, following the imposition of sanctions against Russia and the sabotage of the Nord Stream pipelines.

The EU still receives around 5% of its gas from Russia via Ukraine, according to the latest data. Ukraine’s transit network is connected to the pipeline systems of Moldova, Romania, Poland, Hungary, and Slovakia.

Earlier this month, Slovak state-owned energy company SPP and energy operators from Austria, Hungary, and Italy signed a declaration in support of continuing Russian gas transit, describing it as “the best solution not only for gas consumers in Europe, but also for Ukraine itself.”

The EU declared its intention to end its dependence on Russian energy supplies following the escalation of the Ukraine conflict in 2022. Supplies of higher-cost US fuel have replaced much of the cheap pipeline gas previously delivered by Russia.