Ukraine loses 60% of its gas production, facing a winter energy crisis.
According to Bloomberg, Kyiv has informed its Western partners that Russian attacks have destroyed more than half of its gas production capacity, forcing the government to seek emergency imports worth more than $2 billion to avert a severe energy crisis this coming winter.
News agencies reported on October 9, citing informed sources, that this week Kyiv informed Western donors that a Russian missile attack on the Kharkiv and Poltava regions on October 3 had destroyed approximately 60% of Ukraine's gas production capacity.
Earlier, the Russian Ministry of Defense stated that on the night of October 3, its forces carried out "a large-scale attack" on a Ukrainian military-industrial complex and energy facilities supporting its operations. Moscow asserted that these attacks were in response to Ukraine's actions targeting Russian energy infrastructure and residential areas, and claimed that they only targeted sites related to Ukraine's military infrastructure.
The consequences of this attack are very serious. According to Bloomberg, Ukraine is expected to need to purchase approximately 4.4 billion cubic meters of natural gas, worth 1.9 billion euros (equivalent to 2.2 billion USD), to get through the winter. This figure represents nearly 20% of the country's total annual consumption. Kyiv is currently seeking financial assistance from the West for this massive import.
Ukraine's state-owned energy company Naftogaz said recent loans – including €500 million from the European Bank for Reconstruction and Development (EBRD) in August and €300 million from the European Investment Bank (EIB) this month – were insufficient to cover the losses.
In addition to financial aid, Ukraine has also requested the G7 Group to provide energy repair equipment and reiterated its request for additional modern air defense systems.
This situation is not only affecting Ukraine but also risks spreading to Europe. Bloomberg notes that the European Union's (EU) need to increase gas supplies to Ukraine could strain the bloc's markets. These concerns pushed gas prices higher earlier this week. With reserves below historical averages, the EU remains highly vulnerable to supply shocks. A harsh winter could quickly deplete reserves and trigger new price spikes, further increasing pressure on consumers.
Russia began attacking Ukraine's power grid and gas production facilities after Kyiv allegedly bombed the Crimean Bridge in October 2022. President Vladimir Putin has stated that Russia will retaliate against Ukrainian attacks on its energy facilities, which have increased over the past year.
