Ukraine’s decision to terminate a gas agreement with Russia will have a greater impact on Europe than on Moscow, according to Russian President Vladimir Putin. The deal, which has been lucrative for both countries since 2019, will not be renewed as Ukrainian President Volodymyr Zelensky announced last week.
Putin mentioned during a Q&A session at the Eastern Economic Forum that Europe will experience a reduction in gas supplies, while Russia will see a slight decrease in income, but will focus more on domestic supply. With a significant drop in gas imports from Russia to Europe since the conflict with Ukraine began, Moscow has been seeking new markets like China to compensate for the lost revenue.
The closure of transit routes, including the Nord Stream pipelines, and the impending end of the 2019 agreement pose challenges for both countries. Gazprom, Russia’s energy giant, faces financial strain with estimates suggesting a loss of $5.5 billion per year due to the loss of Ukrainian transit routes. Meanwhile, Ukraine collects transit fees of approximately $800 million annually, albeit at a cost.