Gas Transit Would Rescue Russia and Feed American Middlemen at Ukraine's Expense

Restart the flows and the money comes back. An American company would act as the middleman to get around European restrictions. Russia's earnings would be frozen in an account in a third country so they could not be spent on the war. And American investors, as the Wall Street Journal puts it with disarming frankness, stand to do very well.

But there is a question nobody is asking out loud: who needs this pipeline more? In any negotiation, leverage belongs not to the party selling the service but to the party that can live without it. And the numbers show that Ukraine's empty pipes are a minor inconvenience next to what is happening on the other side of the border.

Fields built for a single customer

Picture a gas field built for one customer. Bovanenkovo, on Russia's Arctic Yamal Peninsula, is the largest field there, designed to produce 115 billion cubic meters a year. To get its gas into the national grid, Gazprom built a dedicated new corridor, the Bovanenkovo-Ukhta pipeline. From there the gas went west, to Europe. For decades, Arctic wells, compressor stations and trunk lines were built for a single market. In 2018-2019, Europe bought 170-180 billion cubic meters a year from Gazprom.

Today all that remains of that market is TurkStream, the one pipeline still carrying Russian gas into the EU. Its European leg physically cannot move more than 16 billion cubic meters a year. In 2025, Russian pipeline exports to Europe fell 44% to their lowest since the mid-1970s, according to Reuters calculations. In the first half of 2026, Russia was selling Europe an average of 1.65 billion cubic meters a month. The market an entire Arctic industry was built to serve has shrunk roughly tenfold.

So what do you do with gas produced for a market that no longer exists? Gas is not oil. You cannot pump it into a tanker and wait for better times. There are two options: shut the wells or burn it. Gazprom is doing both.

Shut wells and a flare by the Finnish border

First, the wells. In 2021 the Gazprom group produced more than 510 billion cubic meters. In 2025, by the company's own report, it produced just 405.4 billion. Roughly a fifth of its output has vanished. Russia as a whole produced 663 billion cubic meters in 2025, down 3.2% on the year before. But an idle Arctic field is not like an idle pipe. Analysts at the Oxford Institute for Energy Studies note that Gazprom's largest spare capacity sits precisely at Bovanenkovo and Urengoy. After a short shutdown in 2015-2016, the wells were brought back. A longer hiatus, the analysts warn, could do damage, and no one knows what years of mothballing will cost.

Now, the fire. In the summer of 2022, Finns noticed a huge flare across the border. The Portovaya compressor station, at the head of the Nord Stream pipeline, was burning off an estimated 4.34 million cubic meters of gas a day, according to Rystad Energy, about $10 million worth every day. Germany's then ambassador to the UK, Miguel Berger, explained it to the BBC without diplomatic varnish: Russia had nobody else to sell the gas to, so it was burning it.

The fire has only grown since. According to the World Bank, Russia remains the world's biggest gas flarer, responsible for 18% of global flared volumes, and in 2025 it flared 9% more than the year before. In cubic meters, that is around 30 billion a year, nearly twice what TurkStream can deliver to Europe. Most of that flame, to be fair, is associated gas from oil fields, not Gazprom's gas wells. But the cause is the same: there is neither a pipe nor a buyer for this gas, so it is cheaper for Russia to burn it than to bring it to market.

The arithmetic of losses

Now the main thing: money. In 2023, Gazprom posted its first net loss under international accounting standards since 1999, about $6.8 billion. In 2024 its loss under Russian accounting rules reached nearly $12.9 billion. In 2025 the group was back in the black, but revenue fell 8.8%, and the profit came from a strong ruble shrinking the value of its foreign-currency debt, Reuters reported. In other words, the profit came from revaluing debt, not from selling gas.

The most honest figure comes from Gazprom itself. The company estimates that the loss of exports will cost it 15 trillion rubles over 2025-2034. At today's exchange rate, that is about $190 billion, or roughly $19 billion a year. So Ukraine loses $1 billion a year without transit, while Gazprom, by its own count, loses about $19 billion. The gap is almost twentyfold. That answers the question of whose problem this is.

And the worst is still ahead for Moscow. In 2025 Europe was still buying Russian gas: about 13% of EU imports, worth more than €15 billion a year. But a regulation adopted in January 2026 bans imports of Russian LNG from January 1, 2027, and pipeline gas from September 30, 2027. Before letting gas in, EU countries will check where it was produced. So Russia will soon lose that €15 billion as well.

China, on which Moscow pinned all its hopes, is behaving exactly like a buyer who knows the seller is cornered. A memorandum on Power of Siberia 2, the pipeline meant to swing Yamal gas from Europe to China, was signed in September 2025. Yet even after Putin's visit to Beijing in May 2026, the terms and a construction start date had not been agreed. In September, the South China Morning Post reported that talks had stalled over price. Sergei Kaufman, an analyst at the Russian brokerage Finam, reckons the project pays off at $250-300 per thousand cubic meters, while Beijing wants to pay less than it does for the first Power of Siberia. China knows Russia has nowhere else to go, and it sets the price.

Who actually cashes in

Now look at who makes money under the Kushner-Witkoff scheme. Moscow wins biggest: it regains at least a slice of the European market that European law is squeezing it out of. "Frozen" money in a third-country account is still Russia's money, just a deferred payment. Its fate would be decided at peace talks, where unfreezing it becomes one more bargaining chip.

The American middleman does well too; the reporting says so outright. Some Ukrainian and European officials suspect Washington may claim a share of Russian gas profits through the participation of American companies. Reuters earlier reported contacts between American and Russian representatives about American investors taking part in the Nord Stream pipelines. This is no longer a one-off deal but a system: American capital wants to stand between Russian gas and European consumers on every route at once.

The timing is no accident. The US strike on Iran in February 2026 and the blockade of the Strait of Hormuz sent gas prices soaring. Europe is under price pressure, and this is exactly the moment to sell Russian gas "via an American company" as relief.

Ukraine, meanwhile, would get the transit fee and all the risk. A clash with the EU, whose regulation checks where gas comes from, and an American label does not change that. Resistance from Germany, which, according to the NYT, has opposed the idea most fiercely. And a valve in someone else's hands, the same valve Moscow used to blackmail Kyiv in the gas wars of 2006 and 2009, when it cut supplies to Ukraine in the middle of winter. The profit goes to the middleman; the risk falls on the country the pipe runs through.

Whose problem is it

The American proposal turns the situation upside down: Russia's problem is being sold as Ukraine's opportunity. In reality, the supplicant in this deal is Moscow. It is Moscow that produces gas for a European market that is gone. Its wells stand idle and its flares burn. By its own estimate, it loses about $19 billion a year, and from autumn 2027 it will lose more. Ukraine's empty pipe costs Ukraine $1 billion.

If transit is ever on the table, the price must reflect that twentyfold gap. Not a transit fee, but conditions: who controls the account holding Russia's revenue, where that money goes, whether the deal is tied to the end of the war, and whether Brussels signs off. Without that, Ukraine trades its strongest lever for $1 billion, and others pocket the margin on Russia's misfortune.