Just in case you thought the crisis in Ukraine was winding down, Russia has now made good on its threat to cut off gas supplies to Kiev.
SERGEY KUPRIYANOV, GAZPROM SPOKESPERSON: “Starting today Ukraine is getting gas according to payments. We’ve received zero payments which means there will be zero supplies.” (Via RT)
Ukraine now has to pay for any gas it needs upfront. This comes after Ukraine failed to settle its $2 billion debt with Russia's state-owned gas giant Gazprom. (Via Euronews)
Faced with a Monday deadline to pay up, Ukraine announced this weekend it was willing to pay $1 billion now and the rest of its debt later, but Russia passed on the offer. (Via Voice of Russia)
This back-and-forth over gas pricing between Ukraine and Gazprom has been going on for months and is part of a bigger dispute over whether Ukraine should forge closer ties with Europe or Russia.
Right around the time Russia annexed the Crimean Peninsula, Gazprom ratcheted up Ukraine’s gas bill by 80 percent — the highest price in Europe. (Via European Commission)
Ukraine called the price hike politically motivated, while Gazprom said it was purely commercial. (Via The Wall Street Journal)
The recent breakdown in talks may have had something to do with ongoing clashes between pro-Russia separatists and Ukrainian security forces. (Via ITN)
CNN quotes Ukrainian Prime Minister Arseniy Yatsenyuk as saying: "Ukrainians will not take out of their pockets $5 billion annually for Russia to use this money to buy weapons, tanks and jets to bomb Ukrainian territories."
Russian media outlets presented the story somewhat differently.
RT noted Ukraine’s “chronic” failure to pay its debt.
An op-ed for The Moscow Times blamed Ukraine’s “legal nihilism” for the pricing dispute.
Pravda simply asked do “Ukrainian officials have gas in the heads?”
But while Russia and Ukraine trade blame, the rest of Europe is anxiously watching to see what will happen next. That’s because Europe relies on Russia for about 30 percent of its gas — half of which is piped through Ukraine.
And the winters of 2006 and 2009 are likely still fresh in everyone's minds. When Kiev was late paying its gas bills those years, millions of European homes were without heat for several weeks. (Via The New York Times, BBC)
Even though this latest gas disruption comes during summer, The Washington Post explains its effects could still be felt six months from now. “An extended cutoff could have tough consequences for Europe this winter if Ukraine fails to stockpile enough natural gas in its vast underground storage facilities in advance.”
Ukraine says it can do without gas from Russia until December. Both Gazprom and Kiev have filed claims with an international arbitration court in Stockholm.