Russia will stop gas supply to Austria and other countries via Ukraine, uproar in Europe

Russia-Ukraine News: Russia on Friday informed Austria that it will suspend gas supplies through Ukraine from Saturday. The move signals the end of Russia's oldest gas export route to Europe, which has been running since the Soviet era. The development has sparked a wave of concern across Europe. Experts say that if the route is closed permanently, Europe may face a severe energy crisis.

Ukrainian route: Europe's traditional gas source

Gas supplies to Europe through Ukraine have been going on since the Soviet era. However, the route is now in crisis due to deteriorating relations between Russia and Ukraine and the recent war. Ukraine has already indicated that it will not renew the transit agreement with Russian gas company Gazprom. The current agreement will expire at the end of 2024, and the route is likely to be closed completely from January 1, 2025.

Impact on Europe

Russia ships about 15 billion cubic metres (BCM) of gas to Europe via this route in 2023. This volume is about 8% of Russia's total gas exports. After Russia's invasion of Ukraine in 2022, the EU took rapid steps towards reducing its dependence on Russian gas. Despite this, many European countries still rely on Russian gas for their energy needs.

Major impact on Austria and Slovakia: Austria still gets most of its gas through Ukraine. Slovakia, which meets about two-thirds of its gas needs from Russia, could be severely affected.

Hungary: Russia supplies about two-thirds of Hungary's gas supply, and the closure of the Ukrainian route could put its energy security at risk.

Gas prices likely to rise

Gas prices in the EU had already risen due to a reduction in Russian gas supplies. In 2022, gas prices reached record levels after the Russian invasion of Ukraine. Experts believe that if the Ukrainian route is closed, gas prices may increase further, increasing financial pressure on European consumers.

Alternative gas supply routes

Most of the Russian gas routes to Europe have already been closed. These include:

Yamal-Europe pipeline (through Belarus)

Nord Stream pipeline (under the Baltic Sea)

Currently, some gas is being supplied to Turkey through the Blue Stream and TurkStream pipelines under the Black Sea. Turkey sends a part of the gas it receives from Russia to European countries, including Hungary, but this supply is limited and is insufficient to meet Europe's total needs.

Debate on dependence on Russian gas

Although major European countries like France and Germany have refused to buy Russian gas, countries like Slovakia, Hungary and Austria still buy gas from Russia. These countries argue that Russian gas is more economical than other options.

Earnings from the sale of Russian gas are also an important aspect. Based on an average price of $200 per 1,000 cubic meters of gas, Russia will earn more than $3 billion from gas sales through Ukraine in 2023.

Way forward

The closure of the Russia-Ukraine gas route will require Europe to make major changes in its energy strategy. It has become imperative for Europe to increase investment in renewable energy sources, find alternative gas supply routes and work rapidly towards increasing energy efficiency.

However, to avoid a gas supply crisis in the short term, the European Union will have to rely on options like Norway, Qatar and the US besides Russia. But the question is whether Europe will be able to emerge from this crisis and strengthen its energy security or this crisis will continue for a long time.