Ukraine gas transit risk – can Europe cope?

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Ukraine and Russia are locked in ongoing negotiations over the future of Russian gas transit into Europe via Ukraine. The existing transit and supply contracts expire at 10 am on 1 January (Moscow time). If the two sides fail to reach an agreement, Europe will wake up to a new decade wrestling with gas shortages in the middle of winter – the severity of which will depend on several factors. We explore three possible disruption scenarios to provide a range of price implications for Northwest European markets. Europe has a range of levers to help bring the gas market back towards balance. Some will need to be pulled more than others, with the consequences stretching well beyond European borders. But it is Central and Eastern European markets along with Ukraine itself who will suffer most from any disruption.

Table of contents

  • Introduction
  • Implications for Northwest European hub prices
  • European gas markets have four levers to soften a shortfall
  • Some markets will be much more exposed than others...
  • Conclusions
    • Major events in Ukraine-Russia gas relationships (since 2000)
    • 2005-06
    • 2008-09
    • 2014
    • 2015
    • 2017/18
    • 2019
    • Side’s positions in negotiations

Tables and charts

This report includes 7 images and tables including:

  • Transit routes of Russian gas into Europe
  • TTF under the three scenarios
  • Europe gas market reaction in 2020 to long-term Ukraine transit disruption (Scenario 1)
  • Europe gas market's exposure to Ukraine transit disruption
  • Europe and Ukraine gas market impact by region in 2020 (Scenario 1)
  • Results of Stockholm Court of Arbitration rulings
  • Sides’ positions in negotiations

What's included

This report contains:

  • Document

    Ukraine gas transit risk – can Europe cope?

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