European consumers could face higher natural gas prices if Ukraine does not extend its gas transit agreement with Russia, Kremlin spokesman Dmitry Peskov warned on Wednesday.
The current agreement, which allows Russian gas to travel through Ukraine to Europe, is set to expire on December 31, 2024. Ukraine has repeatedly stated it will not renew the deal, with President Volodymyr Zelenskyy confirming earlier this week that “No one will extend the agreement with Russia.” However, Zelenskyy mentioned that Ukraine might consider gas transit requests from other sources.
At a press conference, Peskov stated that if Ukraine does not extend the deal, European consumers will face significant price increases. He noted that Russian gas is cheaper than alternatives, such as gas from the United States. This price hike could make European industries less competitive, according to Peskov.
Russia is exploring alternative routes for gas delivery to Europe, including a proposed hub in Turkey, Peskov added.
Since the invasion of Ukraine, Russia’s gas exports to Europe have drastically reduced. Before the conflict, Russia supplied about one-third of Europe’s gas and was the largest supplier. Norway has since overtaken Russia as Europe’s top gas supplier.