Ukraine's financial settlement with Gazprom is a complex issue. The two parties have been negotiating a new gas price for Ukraine since 2019.
In December 2019, Ukraine's Naftogaz and Russia's Gazprom agreed on a new gas price for Ukraine, which was set at $235.51 per 1,000 cubic meters. This price is significantly lower than the previous price of $450 per 1,000 cubic meters.
The new gas price is a result of a long-standing dispute between Naftogaz and Gazprom over the transit fees for gas transportation through Ukraine. The dispute has been ongoing since 2015.
The new gas price is expected to save Ukraine around $7.5 billion in gas import costs by the end of 2020.
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Russia's Dispute with Gazprom
Russia's Federal Anti-Monopoly Service (FAS) has launched an antitrust investigation against Gazprom's oil-products trading unit for sharply reducing gasoline sales on the country's main energy exchange.
The investigation comes amid rising consumer fuel costs and potential government intervention to stabilize prices. Russian authorities are now considering new limits on gasoline exports to ensure adequate domestic supply.
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Gazprom had been accused of slashing sales of Ai-92 and Ai-95 gasoline on the St. Petersburg International Mercantile Exchange by 74% and 50%, respectively, between May 20 and June 27. This drop may violate competition law and disrupt market stability.
The Kremlin is under pressure to contain fuel inflation ahead of harvest season and peak summer mobility. By targeting a core subsidiary of Gazprom, regulators are signaling that no state-aligned firm is exempt from domestic supply obligations.
Russia's state-owned natural gas company Gazprom has stopped supplies to Austria, following an arbitration award. OMV, the Austrian utility company, confirmed the news and said it would stop payments for the gas.
Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year. This move by Gazprom is a reminder of Russia's previous actions in 2022, when it cut off most natural gas supplies to Europe.
Ukraine intends to secure $6.9 billion in international arbitration rulings against Russian energy giant Gazprom. President Volodymyr Zelensky said the decisions demonstrate the responsibility of Russia and Gazprom and affirm the strength of international law.
In 2023, the Permanent Court of Arbitration in The Hague found Russia liable for the illegal expropriation of Naftogaz assets following Russia's occupation of Crimea in 2014. A French court authorized the enforcement of a $5 billion arbitration award against Russia for damages caused to Ukraine's state-owned energy company Naftogaz.
Gazprom's actions are not only affecting Ukraine but also other European countries, including Austria. This is a complex issue, but one thing is clear: Gazprom's dispute with regulators and other countries is having far-reaching consequences.
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Gazprom's Gas Flow Issues
Russia's state-owned natural gas company Gazprom has been making headlines with its recent gas flow issues, particularly with its supplies to Austria. Gazprom stopped supplies to Austria early Saturday, according to the Vienna-based utility OMV, after OMV said it would stop payments for the gas following an arbitration award.
Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year, according to Energy Minister Lenore Gewessler. This dependence on Russian gas has made Austria vulnerable to Gazprom's supply disruptions.
Gazprom's gas exports to Europe have been plummeting to levels not seen since the early 1970s. Between January and July 2025, Gazprom exported just 9.93 billion cubic meters of gas to Europe, nearly half of the 18.3 bcm shipped over the same period last year.
Russia cut off most natural gas supplies to Europe in 2022, citing disputes over payment in rubles, a move European leaders described as energy blackmail over their support for Ukraine against Russia's invasion. European governments had to scramble to line up alternative supplies at higher prices, much of it liquefied natural gas brought by ship from the US and Qatar.
Gazprom's total gas exports to Europe could shrink to just 17 bcm for the year, marking an all-time low since the Soviet Union began its westward gas push in the 1970s.
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Russia's Gas Exports
Gazprom's pipeline exports to Europe have fallen to levels not seen since the early 1970s.
Russia's once-dominant position in the European gas market continues to unravel, with Gazprom's pipeline exports to Europe plummeting to levels not seen since the early 1970s.
Gazprom exported just 9.93 billion cubic meters of gas to Europe between January and July 2025, a significant decline from the 18.3 billion cubic meters shipped over the same period last year.
If current trends hold, Gazprom's total gas exports to Europe could shrink to just 17 billion cubic meters for the year, marking an all-time low since the Soviet Union began its westward gas push in the 1970s.
Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year, according to Energy Minister Lenore Gewessler.
Gazprom's exports to Europe have been declining steadily since 2022, when Russia cut off most natural gas supplies to Europe citing disputes over payment in rubles.
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Russia's state-owned natural gas company Gazprom has stopped supplies to Austria, officials said, after OMV said it would stop payments for the gas following an arbitration award.
Gazprom's domestic production is falling fast, with Rosstat reporting a 3.2% year-over-year decline in total gas output during the first half of 2025.
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Ukraine's Financial Settlement
Gazprom Pao has agreed to pay $2.9 billion to Naftogaz, Ukraine's state-owned gas company, as part of the settlement.
This payment is a significant step towards resolving the long-standing dispute between the two companies.
Gazprom Pao has also agreed to pay Naftogaz $7.4 billion in penalties for failing to meet its gas transit obligations.
The settlement includes a provision for Gazprom Pao to pay a fine of $1.1 billion for violating the terms of its gas transit contract.
Naftogaz has been seeking this payment for years, and the settlement marks a major victory for the Ukrainian company.
Gazprom Pao has also agreed to waive its claims against Naftogaz for $3.5 billion in alleged unpaid transit fees.
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Frequently Asked Questions
What are the future plans for Gazprom?
Gazprom plans to supply approximately 11 bcm of gas per year to Uzbekistan from 2026, with a smaller allocation to Kyrgyzstan. The company's future plans also involve uncertain gas supplies to Kyrgyzstan, pending further agreements.
How many employees are in Gazprom?
As of 2019, Gazprom had approximately 473,800 employees. This number may have changed since then, but it gives an idea of the company's workforce size.
Why is Gazprom an important company in Russia?
Gazprom is a crucial company in Russia due to its massive revenue and control over the country's vast gas reserves, making it a dominant player in the energy sector. As the largest company in Russia, Gazprom's influence extends far beyond its economic impact, shaping the country's energy landscape and global presence.
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