Russia’s decision to stop gas exports to European Union (EU) states via Ukraine marks the end of a decades-long energy arrangement, leaving significant geopolitical and economic consequences. The termination of the five-year transit agreement, which expired on January 1, 2025, has sparked tensions across Europe, particularly in Eastern European countries reliant on Russian energy supplies.

Ukrainian President Volodymyr Zelensky condemned the move, stating that Ukraine would not allow Russia to “earn additional billions on our blood.” In contrast, Poland’s government celebrated the cut-off as another victory over Moscow, further isolating Russia from European markets. Meanwhile, the European Commission assured EU states that they were prepared for the change, with most countries able to adjust to the disruption. However, Moldova, which is not an EU member, has already begun experiencing energy shortages.

Russian energy giant Gazprom confirmed that gas exports via Ukraine ceased on Wednesday at 08:00 local time (05:00 GMT). This marks the first time since 1991 that Russia will no longer send gas to Europe through this route. While the immediate impact has been relatively mild for many EU nations, the symbolic and strategic ramifications are profound. Although Russia has lost an important market, President Vladimir Putin asserts that the EU will be the most affected by the disruption.

The EU had significantly reduced its reliance on Russian gas since Russia’s invasion of Ukraine in 2022, with Russian gas comprising less than 10% of EU imports in 2023 compared to 40% in 2021. Despite this decline, several Eastern EU countries, including Slovakia and Austria, remain heavily dependent on Russian supplies, making the cessation of gas flow a critical issue. Slovakia, in particular, has become the main entry point for Russian gas into the EU and now faces higher costs for alternative routes. Slovakia’s Prime Minister, Robert Fico, warned of “drastic” consequences for EU countries following the deal’s expiry, and tensions escalated when he threatened to halt electricity exports to Ukraine. Zelensky accused Fico of aiding Moscow’s war efforts and weakening Ukraine.

Poland has pledged support to Ukraine in case Slovakia follows through on its threat, emphasizing the availability of alternative gas routes through terminals in Croatia and connections from Germany and Poland. Poland has also been sourcing gas from the U.S., Qatar, and the North Sea.

Moldova, which relies on Russian gas for power generation, is facing severe challenges. The breakaway region of Transnistria, which depends on Moldova for gas supplies, has already been affected by the cutoff, with heating and hot water suspended. Moldova’s Prime Minister, Dorin Recean, accused Russia of using energy as a political weapon, exacerbating the situation amid a winter cold snap.

The European Union has increasingly turned to liquefied natural gas (LNG) from Qatar and the U.S., as well as piped gas from Norway, to reduce its dependence on Russia. In December, the European Commission announced plans to fully replace gas transit through Ukraine with alternative sources in the coming years.

As the new year begins, many individuals are setting resolutions, and for those aiming to improve their finances, investing could be the right step forward. While the idea of investing may seem daunting, financial experts emphasize that starting small and understanding the basics can lead to long-term benefits.

Breaking Barriers to Investing

Common reasons people avoid investing include fears about risk, a perceived lack of wealth, or a lack of confidence. Yet, investing offers more than just potential profits—it can act as a hedge against inflation, unlike traditional savings.

Financial experts suggest starting with basic investment types, including bonds, stocks, and pooled funds, to understand the landscape and build confidence.

Understanding Bonds

Bonds function like an “I owe you” from a company or government. Investors lend money and receive interest, known as the coupon rate, at regular intervals until the bond matures.

Yield, a key term in bonds, combines the coupon rate and potential market profits to reflect the bond’s profitability. Credit ratings also play a vital role, with higher-rated bonds being safer investments.

Stocks and Shares

Shares, or equities, allow investors to buy a stake in a company, effectively making them part-owners. Share values fluctuate based on company performance and economic conditions, making them a medium-to-long-term investment.

Jason Hollands of Evelyn Partners highlights the importance of patience: “Investing should be long-term because prices fluctuate. You need to tolerate the downs as well as the ups.”

Dividends, another income source, are distributed to shareholders, either as cash or additional shares, further enhancing returns.

Diversifying Through Pooled Funds

Diversification is crucial in investing, often summed up as “Don’t put all your eggs in one basket.” For those with limited funds, pooled investments like mutual funds or ETFs (exchange-traded funds) can help spread risk.

While mutual funds are actively managed by professionals, ETFs often track specific indexes like the S&P 500, offering a cost-effective, passive investing strategy. “Taking trading costs out can significantly impact your returns,” said Colm Moore of Moore Wealth Management.

Alternative Investments

Beyond stocks and bonds, assets like gold, real estate, and cryptocurrencies provide additional options. However, factors such as liquidity and market conditions should be considered. Gold, for instance, is a safe-haven asset but lacks dividend income.

Expert Advice for Beginners

Financial experts advise against impulsive decisions based on market trends. They also recommend paying off high-interest debts and ensuring an emergency fund before investing.

Moore cautions against panic during market downturns: “The biggest mistake is pulling money out during lows. It’s about time in the market, not timing the market.”

With proper planning and patience, investing in 2025 can be a significant step toward financial security.