GAS conflicts between Russia and Ukraine have erupted at the turn of each of the past three years. So when Russia cut off gas to Ukraine on New Year's Day, the news failed to make big headlines. The European Union, which imports a quarter of its gas from Russia, watched the two sides exchange accusations, but tried to stay out of the row, treating it as a purely technical dispute.
In Ukraine itself the mood was relatively calm: the country stocked up on Russian gas months ago and has enough reserves to last it until the spring.Naftogaz, Ukraine’s national gas company threatened to confiscate Russian gas if no new agreement was signed. Russia cited a transit agreement it signed three years ago to separate EU contracts from those to Ukraine which was valid until 2013.
But on Monday January 5th this week the two sides pushed the conflict to a new level. First, a dubious court decision in Kiev unilaterally annulled a transit agreement between Russia and Ukraine. A few hours later Vladimir Putin, Russia’s prime minister, publicly ordered Gazprom, the state-controlled energy giant, to reduce gas supplies to Europe through Ukraine by the same amount that Ukraine was “stealing” from Russia.
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