Russia Cuts Gas to Ukraine

This looks ugly:

Russia halted gas supplies to Ukraine today for the second time in three years in a payments dispute, raising the threat of disruption to natural-gas shipments to Europe, as both sides said they wanted talks to resume.
Negotiations broke down shortly before midnight after Ukraine rejected an offer from OAO Gazprom, Russia’s state gas exporter, to sell it the fuel this year at $250 per 1,000 cubic meters, and insisted that Russia also pay higher transit fees. Ukraine said today it is seeking a price of $201.
The repeat of an energy standoff between the former Soviet neighbors risks further souring Russia’s ties with the West, months after its war with U.S. ally Georgia. Gazprom, which supplies a quarter of Europe’s natural gas, mostly through Ukraine, cut Ukrainian deliveries in January 2006 amid a similar pricing dispute. The shutdown reduced gas flows to Europe and led to questions over both countries’ reliability as suppliers.

The global economic meltdown will have geopolitical effects. We may already be seeing it.

Posted by on January 1st, 2009 at 4:08 pm


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