Moscow has said it will not hold talks with Baku regarding replacing Russian gas transit with Azerbaijani gas to Europe. This decision comes as Ukraine plans to stop the transit of Russian gas from January 2025, in line with the end of the current contract.
At the end of August, Ukrainian President Volodymyr Zelensky announced the cessation of the transit of Russian gas via Ukraine, a decision which has major repercussions on the energy supply of several European countries. Azerbaijan, as a major natural gas producer and energy partner of the European Union (EU), has been tapped by Brussels and kyiv to facilitate discussions aimed at establishing a new agreement.
Are the Negotiations Progressing?
According to Ilham Aliev, President of Azerbaijan, discussions were being considered to use Russian infrastructure to transport Azerbaijani gas to the Ukrainian network. Aliev expressed some optimism in early September, claiming to be in contact with Moscow and kyiv to explore this possibility.
However, Russian Deputy Prime Minister for Energy, Alexander Novak, denied any discussion on this subject. He clarified that “this is not a subject for discussion” and added that the gas transit infrastructure was not intended for such use. Novak also noted that the responsibility for finding a solution lies with the purchasing partners, primarily the Ukrainian colleagues.
Impact on European Countries
kyiv’s decision not to renew the gas transit contract with Moscow creates uncertainty for many European countries dependent on Russian gas. Slovakia, Hungary, Austria and Italy are among the main beneficiaries of current transit, although volumes have fallen by almost two-thirds since 2021, reaching 14.65 billion cubic meters in 2023, data shows official.
In response to the Russian offensive against Ukraine in February 2022, the European Union set the objective of freeing itself from all dependence on Russian natural gas by 2027. This strategy aims to diversify energy sources and strengthening the EU’s energy security.
Economic consequences for Russia
Russian President Vladimir Putin expressed disappointment with Ukraine’s decision, acknowledging that it will lead to financial losses for Russia. The cessation of Russian gas transit through Ukraine could significantly reduce Moscow’s energy revenues, exacerbating already existing economic tensions between Russia and Europe.
This situation is forcing Russia to consider new routes to transport its natural gas to Europe, while navigating an increasingly complex geopolitical context. Discussions with other energy partners, such as Norway or Kazakhstan, could also be reassessed to mitigate the impact of this Ukrainian decision.
Outlook for Azerbaijan
For Azerbaijan, this situation represents an opportunity to strengthen its role as a key supplier of natural gas to Europe. However, without Russia’s agreement, transit options remain limited. Azerbaijan will need to explore alternative routes or strengthen its current infrastructure to meet growing EU demand.
Continuous dialogue between relevant parties will be crucial to determine the future dynamics of the European energy market and ensure a smooth transition to alternative energy sources.
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