By Nina Bachkatov
Everything appeared to be proceeding according to a well-scripted agenda, unfolding through months of indecision, bravado, and uncertainty. The war in Ukraine remained challenging on the front line, yet political and financial support remained unwavering. Few had taken seriously President Trump’s electoral promise to resolve the conflict within 24 hours by presenting President Putin with a deal he could not refuse. The EU was on course to adopt a 16th package of sanctions, bolstered by indications that the Russian economy and budget were facing increasing difficulties in balancing the cost of the war.
Although the package also reflects a lack of creative political alternatives, Brussels remains firmly committed to sanctions, particularly in the energy sector, adhering to its decision to eliminate Russian fossil fuels by 2027. On 4 February, undeterred by Kyiv’s military setbacks and galvanised by the need to respond to President Trump’s geopolitical pronouncements, European Commission President Ursula von der Leyen delivered her equivalent of an inaugural speech. The content had been previewed a week earlier at the EU Ambassadors’ Conference. Her “Competitive Compass” is not significantly different from other “roadmaps” the EU is fond of producing. However, one of its four “concrete measures” to stimulate the continent’s economy over the next five years specifically addresses lowering energy costs.
Evolving Narrative
The notion of cheap energy appears at odds with the EU’s positive reaction to Ukraine’s decision not to renew its expiring contract with Gazprom. On 1 January, the transit of Russian gas was halted, directly impacting Slovakia and indirectly affecting Moldova. Other Central European nations now face steep increases in energy bills for both public and private consumers. Ukraine itself has lost the transit fees, now estimated at around $600,000. Yet, in 2018, then-President Petro Poroshenko campaigned against the Nord Stream 2 pipeline, arguing that it would deprive Kyiv of $3 billion annually in transit revenues. The following year, however, he justified renewing the Gazprom contract for another decade, citing it as a means of ensuring stable relations with Moscow.
Now, President Zelensky, who has long advocated for the EU to sever all deliveries of Russian energy, has adopted a different stance. In early February, he described as “madness” reports in the Western media suggesting that the EU might consider lifting some sanctions on Russian energy to push the Kremlin towards negotiations and secure Brussels a seat at the table. Within days, he put forward his own proposals, positioning the pipeline as both a diplomatic and economic asset for Ukraine. Diplomatically, he cannot afford to be seen as a divisive figure among EU members, especially as US and even NATO support becomes less certain under President Trump. Nor can he ignore the fact that energy costs are central to improving EU competitiveness, particularly when European energy prices are three to four times higher than those in China or the US. Pipeline gas is three times cheaper than LNG and can be transported immediately without the need for costly new infrastructure or grid expansions.
Latest Calculations
Meanwhile, the Kremlin appears to have wagered that, ultimately, neither the EU nor Ukraine would dare to halt transit entirely, given the mutual economic consequences. Indeed, until the final moments, all three parties sought a pragmatic solution to sidestep the impasse. Russian officials argue that Moscow has already redirected much of its trade, including energy exports, away from Europe. Furthermore, the fact that this pipeline has not been targeted like other Ukrainian energy infrastructure and that Zelensky has proposed using sections of it to transport non-Russian gas to the EU suggests its future remains open.
Economic considerations are now carrying greater weight than in the pre-Trump era, as Washington prioritises national interests and threatens trade tariffs, including against the EU. This shift has influenced Zelensky’s approach to rebuilding Ukraine’s industrial base. The pipeline network allows Ukraine to procure energy at a lower cost than alternative sources, such as electricity imports from neighbouring EU countries to replace Gazprom’s supplies. Additionally, pipelines are strategic industrial assets that have long attracted interest from foreign investors keen on Ukraine’s energy system. However, to remain viable, these installations require maintenance—an expense that debt-laden Naftogaz Ukrainy and the national budget cannot sustain. Once decommissioned, they lose all value. Thus, Kyiv has a vested interest in buying time, even if only by negotiating the sale of the one billion cubic metres of gas trapped within various pipeline branches, potentially worth several hundred million dollars.