Ukraine Says Russia Shuts Down All Gas Supplies to Europe

Russia ranks first in the proven reserves of natural gas, and Europe relies on Russia for about 20 percent of its natural gas. But that supply is disrupted as the result of a dispute between Russia and Ukraine, with both sides pointing to the other as responsible for shutting down the pipelines that supply gas to Romania, Bulgaria, Macedonia, Greece, Turkey, Slovakia, Hungary, Slovenia and Italy. Confronting harsh winter weather, European nations are forced to ration supplies, stop some industrial production, plead for agreement between the two gas suppliers while offering to send monitors for the pipelines. “Gazprom said Ukraine was siphoning off for itself supplies destined for Europe, and that Russia would reduce shipments by an equivalent amount,” reports an article in the New York Times. “Russia had already halted all supplies to Ukraine for domestic use, saying its western neighbor was not paying enough for the fuel.” Russia, which depends on oil for most of its budget, is also motivated to increase prices by reducing the supply and discourage Ukraine from joining NATO. Low energy prices lead to domestic troubles for energy producers like Russia, and high prices do the same for energy consuming nations. Such disputes, shortages and hiked prices may reinforce Europe’s desire to seek energy independence. – YaleGlobal

Ukraine Says Russia Shuts Down All Gas Supplies to Europe

David Jolly
Wednesday, January 7, 2009

Click here for the article on The New York Times.

David Jolly reported from Paris, and Andrew E. Kramer from Moscow. Reporting was contributed by James Kanter from Brussels, Dan Bilefsky from Prague, Sabrina Tavernise from Istanbul, and Ellen Barry from Moscow.

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