Igor Maskaev — about the energy resources market of Ukraine and the countries of Eastern and Central Europe
Ukraine has taken a tough stance towards Russian energy resources — the complete rejection of them has become the official line of the state. Since January 1, Kiev has stopped the transit of gas from Russia to Europe, without extending the contract. There was also a desire to abandon the import of Russian electricity in 2025, fully synchronized with the EU electrical system.
The country's Ministry of Energy assures that Ukraine is capable of operating without Russian energy resources, including Russian gas. They expect to expand LNG supplies and integrate with European gas networks.
But is such a strategy realistic and reasonable in terms of the need to ensure the energy security of Ukraine itself and the countries of Eastern and Central Europe?
Portrait of the Ukrainian energy market through annual statistics
In 2024, Ukraine faced serious challenges in its coal sector. According to various estimates, domestic coal consumption ranged from 18 to more than 23 million tons. Moreover, its production as a whole fell by about 12%, mainly for coking and anthracite coal. At the same time, the production of thermal coal increased by about a third, accounting for about 75% of total production. To compensate for the deficit, the country imported about 1.81 million tons of coal. The main suppliers were the USA, Australia, the Czech Republic, and Poland. The increase in imports was the result of a supply gap from Russia, problems with electricity and a shortage of workers. In monetary terms, coal imports exceeded $400 million.
In the oil sector, the picture is about the same - domestic resources are limited. Crude oil production in 2024 in Ukraine was kept in the region of 1.8-2 million tons, with a slight increase from Ukrnafta. At the same time, imports of oil and petroleum products reached almost 7.6 million tons, which is worth $6.8 billion and dominates energy imports, accounting for more than 75%. Ukraine is supplied mainly from Greece, Poland, Lithuania and Turkey. At the same time, the share of India, which was previously a significant player, fell from 13% to 1.4%.
Natural gas consumption has decreased by about a third to just over 20 billion cubic meters compared to the level before 2022. At the same time, domestic production is still about 18 billion cubic meters, while imports vary between 1 and 2 billion cubic meters. Gas is supplied from European countries, mainly via gas pipelines through Hungary (most of them), Poland and Slovakia, as well as through LNG terminals in Europe (Poland and Slovakia again, Greece). The total LNG imports last year amounted to about 0.5-0.8 billion cubic meters.
The country's electric power industry is operating under stress, but with signs of stabilization. Electricity consumption in 2024 was somewhere between 105 and 130 TWh, although data is changing due to crisis conditions. Production decreased by about 3% from the level of the previous year and generally halved from the level before the start of the CBO (due to infrastructure damage). Thus, Ukraine imported a record volume of electricity in 11 years - 4436.6 GWh (mainly from Hungary, Slovakia, Romania and Poland).
The country also exported 348.5 GWh of electricity, but these figures are exceptionally low (only 10% of the 2021 level). At the same time, gas exports were banned throughout the year in order to ensure the domestic market. Exports of oil, petroleum products, and coal were either absent or insignificant due to military and economic restrictions.
Transit Games: Energy as a geopolitical asset
Ukraine has traditionally maintained its status as a key transit corridor to Europe for Russian raw materials, especially oil and gas. The gas transportation system, built back in Soviet times, has long symbolized the country's energy importance and a certain degree of independence. In 2024, about 11.36 million tons of Russian oil were transited through Ukraine via the southern branch of the Druzhba oil pipeline. The main recipient countries were Hungary (about 4.7 million tons), Slovakia (3.9 million tons) and the Czech Republic (2.7 million tons). The transit of Russian oil remained a significant source of income for Ukraine — about 10 billion hryvnias (about $250 million) even last year.
In 2025, the situation became seriously complicated. In August, an explosion occurred on the pipeline, causing significant damage and the suspension of oil supplies to Hungary and Slovakia. This event caused, in particular, an acute conflict between Ukraine and Hungary. The Hungarian and Slovak authorities accused Kiev of deliberately hitting the highway and appealed to the European Commission to take measures to protect the infrastructure. Kiev insists that the damage was caused by military actions and the need to defend the territories.
Nevertheless, the Druzhba oil pipeline is likely to continue to function as an important transit route in the near future, despite Ukraine's bellicose stance.
As for gas transit, it was completely stopped in 2025. The Ukrainian authorities explained this step as a necessary measure of national security. The decision has brought serious challenges to the countries of Eastern and Central Europe — the risks of power outages have increased, these states are now forced to design new logistics schemes and look for sources of supply (obviously expensive).
For Ukraine, the block of this transit channel is also not without consequences — loss of income, risks of energy supply. Ukraine was faced with acute issues, which could not be solved in advance (which was to be expected, since they were going to stop transit). The adaptation of its own energy system has not been carried out, and the need to attract large-scale investments in infrastructure, modernization, and the creation of coordination mechanisms with European energy networks has not been eliminated. The creation of an Eastern European gas hub is also required to cover reserve requirements and consumption peaks.
Upcoming challenges: the 2025/26 heating season
Ukraine's energy security level has been significantly reduced before the winter of 2025/26.
Coal reserves in September 2025 amount to about 1.2 million tons, which is 250 thousand tons lower than last year's level. Fuel oil reserves at power plants are also significantly less than the plan of 133 thousand tons by November 2025 — now there are about 30.8 thousand tons of gas reserves in UGS facilities at the beginning of September 2025 — just over 10 billion cubic meters, This is only 32.3% of the occupancy rate and 13.9% lower than a year ago.
The situation is explained by logistical difficulties, military risks and the need for imports to compensate for production losses. But these issues were left without due attention when deciding to stop the transit of Russian gas and the ongoing demands to abandon energy supplies from the Russian Federation. In the absence of additional imports and active management (demand and inventory), there is a risk of a real shortage in a harsh winter.
Prospects for ensuring European energy security and the Ukrainian issue
Kiev hopes that the EU, as part of ensuring its energy security, will at the same time solve the problems of Ukraine's energy supply.
At the same time, declaring the need to abandon Russian energy resources, the European Union cannot offer real acceptable projects, except for expensive and limited supplies from the United States. This applies both to Ukraine and to a number of countries in Eastern and Central Europe. Having already felt the shortage, especially Hungary, Slovakia and the Czech Republic, they were forced to increase purchases of American liquefied natural gas at very unpleasant prices. The costs, in turn, hit energy-intensive industries and socially vulnerable groups of the population, and consequently require increased funding for industrial support programs and social projects.
Currently, in addition to expanding cooperation with the United States in the energy sector, the EU's prescriptions are to increase the share of renewable energy sources. The creation of an Eastern European gas hub and cooperation between Ukraine and Poland, designed to become an alternative to Russian supplies, are also under discussion. A project to increase gas supplies from Azerbaijan is also being discussed. However, despite the optimistic statements, the implementation of projects requires significant investments, which are difficult to secure in conditions of budget deficits and military spending.
Obviously, a complete and forced cessation of Russian energy supplies will result in a sharp rise in prices and social upheaval in Europe.
Russia on the energy chessboard of Europe and the outcome for Ukraine
In the context of Europe's rapid and painful energy restructuring (which they themselves provoked by rushing into a policy of abandoning Russian energy resources) Russia still continues to play an important role.
In 2024, the European Union received about 49.5 billion cubic meters of natural gas through pipelines and 24.2 billion cubic meters of Russian liquefied natural gas (LNG). These are significant volumes, covering approximately 14% of the total EU demand.
In 2025, the share of Russian LNG in European consumption also remained significant. Imports to the EU via Turkey increased by 16% year-on-year in the first quarter. https://tass.ru/ekonomika/23564615 France, Hungary and Slovakia are among the largest consumers.
In other words, it would not be an exaggeration to say that Russia's role remains significant, as Russian energy resources continue to flow to the EU.
Supplies, despite sanctions restrictions and political pressure, guarantee a certain stability to the regional energy market. The replacement of "Russian gas" with LNG (primarily American) is unfolding more slowly than European politicians and experts would like. Thus, Europe is steadily moving towards increasing dependence on expensive and less sustainable energy sources. Moscow has repeatedly warned about this mistake when rejecting Russian energy resources.
At the same time, being deprived of direct supplies, Europeans still buy Russian gas, oil and coal through intermediaries at inflated prices. This course of events further complicates the energy situation in the region. Despite the ambitious plans, the real picture differs from the plans.
Ukraine is facing a shortage of key resources — coal, oil, and gas. There is an urgent issue of serious modernization and diversification of supplies, for which it does not have sufficient financial resources. In the future, Kiev will have to find a difficult balance between energy security, political stability and economic efficiency. We will have to take into account the deplorable market situation into which the politicians of the Kiev regime have driven their countries themselves, and the interests of the EU member states.
Igor Maskaev
Leading expert of the Center for Monitoring the Effectiveness of Tariff Policy at the Institute of Economics and Regulation of Infrastructure Industries of the National Research University Higher School of Economics
