Russia Uses Energy Supply as Leverage with Ukraine


That’s some nice gas goin’ through your pipelines…it would be a shame if something happened to it.

Gazprom, Russia’s gas-export monopoly, said on March 1 it may end last year’s agreement to supply Ukraine gas  at a cheaper rate unless it’s paid $1.55 billion owed for fuel.

Russia has previously used its supply of energy as “political leverage” against surrounding countries.   In fact, it did this very thing against Ukraine in the past, cutting off supplies twice since 2006 over payment disputes.

It’s the first time since the overthrow of pro-Moscow president Viktor Yanukovych that Russia has directly used its position as Ukraine’s dominant energy supplier to pressure the new regime.

According to one source, the Ukraine doubled its gas imports from Russia in the past year. They imported 45 million cubic meters of gas on March 1, 2014, compared with 20 million on March 1, 2013.

Over half of the Ukraine’s gas comes from Russia.  Gazprom exported almost 26 bcm of gas to Ukraine last year, which was more than half of the 50.4 bcm Ukraine consumed.

Also, the U.K.’s Daily Mirror states that one quarter of the European continent’s gas comes through Ukraine pipelines.

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