The delivery of Russian gas to Europe via Ukraine definitively ceased this Wednesday, January 1, 2025, after the expiration of a contract signed between the two countries in 2019.
It’s the company Russian energy Gazprom which announced the cessation of these exports, citing the expiration of a transit contract. This decision puts an end to the use of oldest gas pipeline connecting Russia to Europe, a work dating from the Soviet era.
According to data published by the Ukrainian administration, Russian gas exports to Europe fell by almost 28% in 2023a decrease of 15 billion cubic meters compared to the previous year.
Since the start of the conflict in Ukraine in February 2022, the European Union has intensified its efforts to reduce its dependence on Russian gas, judged too strategic for Moscow. Member States have therefore increased initiatives to diversify their sources of supply, turning in particular towards United States, Qatar and Norway.
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This decision by Moscow comes as gas prices in Europe have increased. However, the reduction in Russian deliveries has had serious economic consequences for the continent: slowdown in activity, rise in inflation and worsening of the cost of living crisis.
The global gas market turned upside down: Algeria at the heart of the new situation
Russia’s decision to cut off the gas tap to Europe has caused a profound transformation of the European energy market. As the continent desperately sought to diversify its sources of supply, Algeria has established itself as a key player.
Last October, a historic turning point was reached: Algeria has become the leading gas supplier to the European Unionthus dethroning Russia. According to the data d’EurostatAlgeria now supplies plus a fifth of the gas needs of EU countries.
This development is the result of an ambitious energy strategy and massive investments in gas infrastructure.
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Thus, the year 2025 brings new dynamics to the energy markets. Indeed, natural gas prices in Europe have experienced a significant increasecrossing a symbolic threshold of 50 euros per megawatt hour (MWh) on December 31.
Analysts expect this upward trend continues in 2025with prices that could reach 60 euros per MWh. This situation could offer new prospects for natural gas exporting countries, such as Algeria, which has significant reserves and significant production capacity.
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