Russia wants Ukraine gas transit but stalls on timing

Subject

The future of Russian gas transiting Ukraine.

Significance

Ukraine and Russia are engaged in both discussions and litigation about transit fees and natural gas volumes, as the future of gas reaching Europe via Ukraine hangs in the balance. A court of arbitration has begun hearing a new legal dispute between the two state gas companies, following the launch of tripartite (with the EU) consultations on what happens once the current transit contract expires in December 2019.

Impacts

• Ukraine stands to lose transit fees that have created services trade surpluses; the loss would exacerbate balance-of-payments pressures.
• Ukraine's diminishing role as a gas transit route reduces its overall security.
• Pro-Western sentiment may be dented if EU states fail to support Ukraine's position.