Ukraine's gas deal refusal cripples Moldova's industry

Moldova, a country emerging from a history fraught with conflict and economic turmoil, is experiencing significant repercussions due to a recent gas supply cut-off. On January 1, 2025, Ukraine ceased the transit of Russian gas across its territory to Europe, which had previously enabled Russian gas supplies to flow into the breakaway region of Transnistria. This cut-off has resulted in the immediate closure of all industrial companies in Transnistria except for those that produce food. Mr. Sergei Obolonik, First Deputy Prime Minister of Transnistria, reported that around 450,000 people are facing dire economic conditions as a result. As Transnistria grapples with the fallout of this energy crisis, its local energy company has taken drastic measures, cutting heating and hot water services to homes. Residents are urged to conserve warmth by huddling together in single rooms and utilizing electric heaters where available. The region, predominantly Russian-speaking and historically linked to Moscow, has had Russian gas supplies significantly reduced, leading to concerns over long-term operational capability of local businesses. Mr. Vadim Krasnoselsky, the pro-Russian leader of Transnistria, spoke about the urgency of the situation. Despite assumptions that Transnistria might endure due to its ties with Moscow, the region is experiencing a bleak reality. Gas reserves are said to last for approximately ten days under limited usage conditions, putting extensive pressure on households and the overall economic landscape. The main power plant, once reliant on gas, has switched to coal to sustain electricity supplies for the regions of Transnistria through January and February. The loss of energy supply is a crucial turning point for both Transnistria and Moldova. As Moldova seeks to diversify its energy imports to decrease reliance on Russia, Transnistria's history of not paying for gas under a tacit agreement with Gazprom complicates the situation further. Efforts from Moldova’s national gas company, Moldovagaz, aim to help supply gas from alternative sources, but immediate solutions remain elusive. This situation reflects not only the fragility of energy dependence in Eastern Europe but also signals potential long-term shifts in economic viability for regions like Transnistria.