Vladimir Putin might have lost a slice of revenue after Kyiv closed its gas pipeline to Russian supplies, but Moscow already has alternatives for shipping the fuel that stand to shield it from any serious economic hit.
Russia plans to expand exports of liquefied natural gas while routing pipeline gas to other buyers like China.
“We will continue to increase our share on world LNG markets” even as sanctions aim to halt this growth, Putin said during his annual press conference on Dec 19. He also expressed confidence that Russian gas-giant Gazprom PJSC would survive the end of pipeline transport through Ukraine.
Despite calls to ban such supplies, Europe is buying a record amount of the super-chilled fuel from Russia, predominantly from the Novatek PJSC-led Yamal LNG plant.
The volumes have surpassed what Russia was selling through Ukraine before Jan. 1, when Kyiv, refusing to allow any more transit that funds Moscow’s war machine, closed off the five-decade old route through its territory.
The situation highlights how hard it is for Europe to cut ties with Russia, which over the last decade entrenched itself as a key commodities supplier to the continent. It also casts a spotlight on how the February 2022 invasion of Ukraine has forced Russia to keep readjusting its trading network. Still, Moscow has shown that even when one avenue to markets closes, there are often others still open for Russia.
Russia’s LNG exports overall reached a record last year, ship-tracking data show.
Before the invasion, Russia used to sell about 155 billion cubic meters of pipeline gas to Europe per year. In 2024, the country exported roughly 30 billion cubic meters of gas to the region, with over a half of volumes going via Ukraine.
Since most of Russia’s piped gas had already stopped flowing to Europe, the discontinuation of the Ukrainian line won’t affect the economy much, said Tatiana Orlova, an economist at Oxford Economics.
“Europe will still need gas as all its efforts to wean itself from Russian gas have not been successful,” Orlova said. “It will probably end up buying more Russian LNG to make up for the drop in natural gas imports from Russia,” she said.
Gazprom sold about $6 billion worth of gas through Ukraine in 2024, Bloomberg calculations show. Yet, most economists and researchers foresee a muted effect on the economy from being deprived of those sales. Russia will lose an equivalent of about 0.2% to 0.3% of gross domestic product, according to various analyst estimates.
“The figures are too small to make a dent in Putin’s war machine,” David Oxley, an economist at Capital Economics said in a note last week. For comparison, Ukraine stands to lose roughly 0.5% of GDP, he said, stemming from an end to the fees it collected for transit of the gas.
Slovakia, heavily reliant on Russian gas and also earning from transit fees, is set to lose 0.3% of GDP, according to his estimates.
On top of LNG sales, Russia also has other pipeline options for shipping gas that will help make up for the loss of the route through Ukraine.
Shipments to China, which is overtaking Europe as the largest market for Russia’s pipeline gas, were forecast to reach around a record 31 billion cubic meters in 2024. They are set to rise to 38 billion cubic meters this year as the Power of Siberia link has reached the full design capacity.
That would compensate for half of the volumes lost when transit via Ukraine ended, according to estimates by Sergey Vakulenko, a scholar at the Carnegie Endowment for International Peace.
Gazprom may sell more through TurkStream, the direct gas pipeline between Russia and Turkey under the Black Sea that also helps supply some European clients. In 2025, Gazprom could sell 25 billion cubic meters to Turkey and 15 billion cubic meters to Europe through TurkStream, Vakulenko estimates.
Russia plans to re-direct some fuel to countries in Central Asia and will work to increase the capacity of a Soviet-era pipeline from Russia to Uzbekistan through Kazakhstan.
Politically, the gas issue gives the Kremlin an opportunity to demonstrate that Putin isn’t a pariah, said Sergei Markov, a political consultant close to the Kremlin.
“For Moscow, it is extremely important that the diplomatic blockade is being broken for the second time,” Markov said, referring to Slovak Prime Minister Robert Fico’s surprise visit to Moscow on Dec. 23 to discuss gas among other things. He was the second European leader to visit Moscow since Russia invaded Ukraine after Hungarian Prime Minister Viktor Orban’s trip in July.
Putin last month said that Russia is ready to ship gas to Europe, but he cautioned that any new deal would likely be complicated to reach, even given the rising prices from tighter supply now facing Europe.
Still, the plans for both pipeline gas and LNG may face challenges of their own. While Russia aims to launch exports via a second link to China in two years, talks for a third pipeline have stalled over disagreements about the terms.
Russia seeks to triple LNG exports to 100 million tons in 2035, from last year’s 33 million tons, but western sanctions on all key future projects and the LNG tanker fleet complicate that.
“The natural gas and LNG landscape has changed dramatically for Russia in the last three years,” said Claudio Steuer, an energy consultant and faculty member of IHRDC, Boston. It requires “far greater investment and effort for a less profitable business” now that Russia needs to search for business further afield with buyers that are more price sensitive.
Sanctions have already stifled Russia’s aims for growth in LNG. Novatek’s newest project, Arctic LNG 2, last year managed to start limited exports, but sanctions imposed by the US and its allies limited the plant’s access to ice-class tankers needed to navigate frigid northern waters and made foreign buyers reluctant to buy the shipments.
In 2025, the focus will be on what Donald Trump decides to do about sanctions on Russia. Muddying the picture are the US’s own ambitions to supply more of its LNG to Europe.
A ban on transshipping Yamal LNG cargoes in European ports could also complicate logistics for Russian supplies to Asia when the Northern Sea Route is closed, but sanctions may actually lead to more of that supply being sent to Europe instead.
In 2024, China significantly strengthened its position in Serbia’s economy, becoming its largest trading partner, overtaking the European Union.
As of 2023, the volume of bilateral trade between China and Serbia amounted to USD 4.35 billion, up 23.7% year-on-year. In 2024, after the entry into force of the Free Trade Agreement between the two countries on July 1, further growth in trade accelerated, which led to an increase in trade with China compared to the EU. This is reported by the Serbian Economist TV channel.
One of the growth factors was the increase in imports of high-tech equipment, electronics and raw materials for the metallurgical industry from China. In addition, China is actively investing in key infrastructure projects in Serbia, such as the construction of an industrial park near Novi Sad and the modernization of the Belgrade-Budapest railway line.
For example, the project to build an industrial park near Novi Sad with an investment of 300 million euros will create about 5,000 new jobs.
Modernization of the Belgrade-Budapest railway line and other infrastructure projects aimed at improving the transport network and logistics in the region.
Strengthening ties with China allows Serbia to diversify its trade relations and reduce its dependence on the EU and Russia, which contributes to sustainable economic growth and development of key industries.
Serbian Economist – https://t.me/relocationrs
In December 2024, Ukraine imported dairy products (DP), in particular, under headings 0401-0406 UKT FEA (condensed milk and cream, condensed milk and cream, fermented milk products, whey, butter and other fats, cheeses of all kinds and cottage cheese) for $38.5 million, which is a record value for 2022-2024.
According to the Union of Dairy Enterprises of Ukraine (UDEP), the previous maximum (in terms of value) of about $29 million was recorded in January 2022 and December 2023.
Analysts noted that the volume of dairy imports in December 2024 was more than a third higher than in December 2023.
“This was the result of the price situation in the raw milk market in the second half of 2024. From June to December, prices for raw milk of extra quality in Ukraine increased by almost 45% (from less than UAH 14 to more than UAH 20 per kg). This automatically led to a decrease in the competitiveness of domestic dairy products, especially cheese, in the domestic market. As a result, by the end of November, the price of raw milk in Ukraine came close to the European average, exceeding the indicators of some European countries with developed dairy farming,” the industry association explained.
At the same time, the volume of imports of dairy products in December 2024 was more than 2.1 times higher than the corresponding figure for May-June 2024, when Ukraine recorded a positive balance of exports and imports of foreign trade in these goods. According to analysts, the volume of cheese imports increased the most: in December, Ukraine imported more than 5.34 thousand tons of this product worth about $32 million, which is 43% more than the previous maximum in December 2023, when 3.73 thousand tons of cheese were imported. In July-October, the standard indicator of cheese imports to Ukraine amounted to about 3 thousand tons.
Exports of dairy products in December 2024 declined sharply compared to previous months, to their lowest level since March 2024. While the average export of these products in June-November exceeded $20 million, in December it fell below $16 million. Export volumes decreased significantly: TP 0405 (oil and milk fats) amounted to only 44% of the August figure and 68% of the November figure; TP 0406 (cheeses) was at 60% of the October-November figure.
“Imports in value terms in December 2024 were 2.4 times higher than exports, which is a record value for the period of martial law in Ukraine (the previous maximum was recorded in December 2023, when the excess was 2.15 times),” the business association stated.
Experts predict that in January 2025, the negative trend in foreign trade in dairy products will continue, with imports significantly exceeding exports.
“It is obvious that the level of raw milk prices that was formed in early December 2024 causes the loss of competitiveness of domestic dairy products both on foreign and domestic markets. The only way out of this situation is to increase the supply of raw milk, which is possible only through the implementation of effective measures to stimulate investment activity in the dairy sector in Ukraine,” the UMPA summarized.
Espresso in Ukraine has risen in price again: In 2024, the average price for a cup of coffee was 31 UAH, which is 11% more expensive than a year earlier, according to the Espresso Index study by Poster POS, conducted for the Opendatabot service.
According to the study, overall, espresso in Ukraine has risen in price 1.7 times since the start of the full-scale war – from UAH 19 in 2021 to UAH 33 at the end of 2024.
As of the end of December, the most expensive coffee in Ukraine, as in 2023, is drunk in Odesa region – 40 UAH per cup. In just one year, the price in the region has increased by 20%. Next comes Lviv region, where a cup of espresso costs UAH 39. The third place was taken by Volyn region, where a cup of espresso costs 37 UAH.
The cheapest coffee for the second year in a row is recorded in Khmelnytsky and Sumy regions: 28 UAH per cup.
The researchers noted that in 2024, the price of espresso rose the most – by 29% – in Vinnytsia region: up to UAH 31 per cup. Only in Kharkiv region did the cost of a cup of espresso remain unchanged at UAH 34.
“Espresso is the main component of every coffee drink, so its cost directly affects the price of any drink in a cafe,” Opendatabot explained.
The Espresso Index is an economic indicator used to measure the cost of a standard portion of espresso in different cities around the world. It can be useful for comparing the price level and cost of living in different places. Such an indicator helps to assess how big the difference in prices for the same goods and services in different countries is, reflects purchasing power and inflation, according to Poster POS.
Ukrainian restaurant automation company Poster POS is a Ukrainian restaurant automation company that is a developer of a HoReCa accounting program that is installed on tablets. More than 50 thousand establishments use the developer’s services.
Last year, Kyiv region received more than UAH 1.155 billion from the state budget to purchase 497 apartments for veterans and their families, Kyiv Regional State Administration reported in a telegram on Saturday.
Thanks to the support of Andriy Zasukha’s charitable foundation and Kolos Kovalivka football club, the first inclusive town with 59 modern houses for veterans was built in the region.
There are nine veteran hubs in the region. These include three classic hubs in Boryspil, Brovary and Irpin, as well as six veteran spaces. Another hub in Bila Tserkva is planned to open soon.
Since the beginning of 2024, 753 combatants have applied to the Kyiv Regional Employment Service. Thanks to the support of the service, 208 people have already found jobs.
There are already 98 veteran-owned businesses in the region, enabling former military personnel to realize their entrepreneurial initiatives.
Over the course of the war, the United States has allocated $177 billion to Ukraine, but we have not received half of these funds, President Volodymyr Zelenskyy said.
“If we take, for example, the money of the United States of America, during this entire time of this war, about 177 billion dollars have been voted or decided. Let’s be honest. We haven’t received half of this money,” Zelensky said in an interview with Lex Friedman published on Sunday on the YouTube channel of the Office of the President of Ukraine.
