European gas prices reached a 15-month high on Thursday after Ukraine blocked the transit of Russian gas across its territory into the European Union.

The Russian state-run firm Gazprom is set to lose more than $5 billion a year following the route’s closure, which Ukrainian President Volodymyr Zelenskyy called “one of Moscow’s biggest defeats.”

Kyiv will lose about $800 million in transit fees from Moscow.

Despite the rise in gas prices on Thursday, the impact on Europe will likely be limited, said energy analyst Thomas O’Donnell, a global fellow at the Wilson Center based in Berlin.

“It was all prepared for. It’s basically all priced in. Of course, there’s winners and losers to a certain point. Certain countries are more dependent on this than others – Slovakia and Hungary, for example, and Austria,” O’Donnell told VOA.

“Austria is pretty well prepared. They have alternative supplies lined up from Germany and Italy and others. And Slovakia will not run out of gas. They will have plenty of gas. It’s just that they’ll have to pay more, like everybody else has all along,” he added.

Moldova was among the countries most reliant on Russian gas supplied via Ukraine. In the breakaway region of Transnistria, which is controlled by Russian forces, residents lost heating and hot water on Wednesday as authorities urged people to dress warmly and use electric heaters.

Ukraine war

Ukraine’s Zelenskyy indicated last month that he would not renew a five-year contract to allow the transit of Russian gas across his country, which expired on December 31, explaining that he would no longer give Moscow “the opportunity to earn additional billions on our blood.”

Russia launched its full-scale invasion of Ukraine in February 2022. Europe has since managed to wean itself off Moscow’s gas supplies far more quickly than Russian President Vladimir Putin anticipated, O’Donnell said.

“He thought this would force all the European countries that get this gas into a situation where they would capitulate — and they would be unwilling to support Ukraine in the war, and unwilling to show their solidarity. He also thought the war would be over in three or four days. But it just didn’t work,” O’Donnell said.

“They’ve lost their entire European market, essentially. The second-largest gas fields in the world in Western Siberia have no outlet now,” he added. “Putin portrays himself as a great Russian nationalist. Well, this great Russian nationalist just lost one of the biggest businesses Russia ever had.”

In 2023, Gazprom recorded a loss of almost $7 billion, its first annual loss since 1999.

Slovakia anger

Slovakian Prime Minister Robert Fico, who enjoys a close relationship with Putin, has strongly criticized Ukraine’s decision. Putin hosted Fico last month in Moscow, where the two leaders reportedly discussed the future of Russia’s gas exports.

Fico also opposes Western support for Kyiv in its war against Russian invaders. Speaking on Wednesday after Ukraine’s termination of the transit deal, the Slovakian leader accused the EU of sacrificing the interests of smaller states.

“We must see that selfish national interests of the big [member states] and meaningless geopolitical goals are beginning to dominate this community … ignoring the needs of smaller ones,” Fico said in a televised address. “When the transit of gas through Ukraine is stopped, [it] will have drastic impacts on all of us in the European Union, but not on the Russian Federation.”

European dependence

In reality, the European Union has drastically cut its dependence on Russian gas since Russia’s February 2022 invasion of Ukraine. Moscow supplied over 40% of the bloc’s gas needs in 2021, but that had fallen to about 8% by 2023, according to EU figures.

Europe has found new suppliers, said O’Donnell.

“Norway has done all they could to increase their supplies, and that’s been extremely helpful. They’re now on the scale of what Russia used to be,” he said.

“Number two, the United States zoomed up its supplies to Europe,” he added. “This was very crucial. In 2023, something like 67% of all [liquefied natural gas] that’s exported from the U.S., which is a huge amount, was going to Europe. And that supplied 47% of their LNG. I think in 2024, it looks like it supplied about 37%.”

EU-US trade

EU officials have indicated that the bloc will seek to strengthen its energy trade with the U.S. under its next president, Donald Trump.

“We are ready to discuss with President-elect Trump how we can further strengthen an already strong relationship, including by discussing our common interests in the energy sector,” EU Commission spokesperson Olof Gill said on December 20. “And as you all know very well, the EU is committed to phasing out energy imports from Russia and diversifying our sources of supply.”

Slovakia’s Fico, however, has threatened to cut the transit of European electricity to Ukraine in retaliation for Kyiv’s decision to cease transiting Russian gas.

Imports of Russian gas through Ukraine made up about 5% of Europe’s total supplies in 2024. Some of the gas was sent on to Western Europe through Slovakia — and that largely explains Fico’s concerns, said O’Donnell.

“Slovakia was making something like half a billion dollars on transit fees passing the [Russian] gas across their country through their pipeline system onto others — so, redistributing the gas,” he said.

‘Security risk’

In a post on the social media site X, Zelenskyy said that Fico’s relationship with Putin was a big security issue for Europe because “his key goal is to deal with Russia, and this is what benefits him. Why is this leader so dependent on Moscow? What is being paid to him, and what does he pay with?” Zelenskyy wrote on December 23.

Moscow’s other supply routes to Europe are limited. The Yamal-Europe pipeline via Belarus was shut down in 2022 following a payment dispute between Russia and Poland and has not reopened.

Months later, the Nord Stream pipeline under the Baltic Sea to Germany was blown up. It remains unclear who was responsible.

Russia is still able to supply gas to Hungary, Turkey and Serbia through the TurkStream pipeline.