Gazprom Halts Gas Shipments to Ukraine

Russia’s OAO Gazprom and Ukraine’s Naftogaz have been mud wrestling for months over gas pricing and debt issues. This fight between state-controlled companies has been widely publicized and we won’t regurgitate the details here. The dispute reached a new low today, however, with Gazprom announcing that it had reduced the flow of natural gas into Ukraine by an amount equivalent to what Ukraine itself is consuming. This is being done in an attempt to force Ukraine to pay for gas in advance.

This is the third time that Gazprom has halted gas flows to Ukraine and the previous curtailments affected gas deliveries to other European countries that receive shipments that transit through Ukraine. Numerous press outlets are reporting on this development. Here are three stories that seem particularly insightful:

Fortunately, this particular supply disruption comes after a mild winter and Ukrainian and European gas stocks are higher than normal. Nonetheless, this is a serious, negative development that underscores the urgency facing those Europe nations that need desperately to diversify their fuel supplies and gain greater energy security.

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