Russia’s gas transit through Ukraine will cease on January 1st, 2024, marking the end of a long-standing energy relationship. This closure, coinciding with the expiration of a transit deal, has minimal expected market impact due to Europe’s diversification of gas sources following the Ukraine war. While the EU’s reduced reliance on Russian gas caused economic challenges, including inflation and a cost-of-living crisis, alternative suppliers have mitigated potential disruptions. The pipeline’s closure carries significant geopolitical weight, reflecting Russia’s diminished influence in the European energy market and Gazprom’s substantial financial losses.
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Following a previously agreed-upon October 2024 agreement, Russian border guards withdrew from the Agarak checkpoint on the Armenia-Iran border on January 1, 2025, leaving Armenian forces in sole control. This marks a significant step in Armenia’s reduced reliance on Russian security, following a similar Russian withdrawal from Zvartnots International Airport in Yerevan five months prior. The Russian presence at Agarak dated back to 1991. This action underscores Armenia’s broader shift away from its longstanding close relationship with Russia.
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On New Year’s Day, Russia will cease gas exports to Europe via Ukrainian pipelines, ending a five-year transit agreement and marking a significant geopolitical shift. This halt, coupled with an impending cold snap, will severely test Europe’s gas reserves, already depleted faster than in previous winters. The price of gas is rising, and the situation could stress-test European markets, particularly as countries face reduced wind power and increased heating demand. While some countries, like Slovakia, pressure Ukraine to renegotiate, Ukraine refuses a deal benefiting Russia financially.
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In its December 31st report, the General Staff of Ukraine’s Armed Forces estimated total Russian troop losses since February 24, 2022, at 789,550, including 1,610 casualties in the preceding day. This staggering figure is accompanied by the destruction of significant military hardware, encompassing over 9,600 tanks, more than 20,000 armored vehicles, and thousands of artillery systems and aircraft. The losses also include substantial numbers of drones, vehicles, and naval vessels.
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Foreign Minister Sergei Lavrov announced Russia will end its self-imposed moratorium on deploying intermediate- and short-range nuclear missiles, citing the US’s global deployment of similar weapons. This decision follows a recent Russian missile test and is presented as a retaliatory measure to US and UK arms supplies to Ukraine. The US plans to deploy long-range missiles in Germany in 2026, a move defended by Germany but criticized by Russia as a significant threat. This escalation reverses decades of arms control agreements, raising concerns about a new arms race and global instability.
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Leaked Russian military documents from 2013-2014, obtained by the Financial Times, detail target lists for a potential war with Japan and South Korea, including 160 sites such as nuclear power plants and key infrastructure. These plans, focusing on disrupting troop movements, highlight Russia’s strategic concerns about its eastern borders and potential vulnerabilities in a conflict with NATO. The documents, originating from the Russian Armed Forces’ Combined Arms Academy, also reveal insights into Russian nuclear weapons doctrine and wargame scenarios involving China and Europe. The targeting of civilian infrastructure, such as power plants and bridges, suggests a willingness to engage in widespread destruction. The FT notes that the plans’ overestimation of Russian missile capabilities is now evident.
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On December 31st, over two dozen trucks carrying 500 tonnes of Ukrainian wheat, the first shipment under the Grain from Ukraine program, will arrive in Syria. This flour will provide free food for approximately 167,000 Syrians for one month. This initial delivery fulfills a promise to bolster Syrian food security, with the potential for significantly larger future shipments. The program has already sent 23,000 tonnes of maize to Mozambique and Malawi.
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A drone attack on December 31st ignited a fire at an oil depot in Yartsevo, Russia’s Smolensk region, approximately 500 km from Kursk. Smolensk Governor Vasily Anokhin confirmed the incident, attributing the fire to drone debris causing a fuel spill. This attack, one of several recent Ukrainian strikes targeting Russian oil infrastructure, aims to disrupt Russia’s war effort by reducing oil production, which has fallen to its lowest level since 2005. The use of long-range weapons in these deep strikes is enabled by President Biden’s authorization.
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For the first time globally, a Ukrainian Magura V5 maritime drone successfully destroyed a Russian Mi-8 helicopter. The attack, carried out by DIU’s Group 13 on December 31st near Cape Tarkhankut, utilized R-73 SeeDragon missiles. A second Russian helicopter was also hit but managed to return to base. This successful strike follows reports of Ukrainian Magura V5 drones being equipped with air-to-air missiles in May 2024.
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Former Lithuanian Foreign Minister Gabrielius Landsbergis warns that Russia’s hybrid attacks against NATO, encompassing sabotage, cyberattacks, and assassination attempts, “look like war.” He stresses the urgent need for NATO to establish clear red lines and define retaliatory measures to deter further aggression. Landsbergis expresses concern that NATO’s current response is insufficiently swift and decisive, potentially emboldening Russia. He suggests that a sufficiently severe hybrid attack could even trigger an Article 5 response.
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John Q. Hosedrinker