Russia, Ukraine and natural gas, once more…

Once again Russia and the Ukraine are at it over the issue of the latter’s unpaid gas bills. Out of the 390 cubic metres of Russian natural gas that go through Ukrainian territory each day, 300 are bound to be transited to other European countries. While Gazprom, Russia’s natural gas monopoly, has announced it has limited its deliveries to these 300, final destinations, among them Bulgaria and Romania, have been experiencing a drop in deliveries, something which has raised suspicions that Ukraine is siphoning off gas meant for transit rather than its own consumption. Ukraine on the other hand is claiming this is happening for technical reasons. Since siphoning off is what is generally assumed to have happened the last time we saw a similar row, it is difficult to make this claim and still expect people to believe you. Nervousness is about and the European Union’s Czech presidency has demanded the conflict be resolved quickly so as not to jeopardise deliveries and is also attempting to mediate.

This situation has several interesting features to it. First of all, this is not merely a show-off of Russian power (even though there is an element of it in there); there is no doubt that Ukraine has been receiving subsidised gas all this time and there has for several years been a genuine eagerness on the part of Russia to receive prices closer to the correct market value and this has not only affected Ukraine but also Belarus, which has had a far cosier relationship to its neighbour these past years, to no avail. Secondly, it is likely to have an effect on Ukraine’s relationship to the European Union. If, yet again, Ukraine is indeed siphoning off gas that is meant for EU countries, irritation is likely to rise. It might increase support for the new Russian pipeline running across the Baltic Sea, circumventing the most troublesome transit countries, and thus in the long run make Ukraine less able to rely on the EU to exert pressure on its main energy supplier. Russia could easily live with such an outcome. Ukraine on the other hand might have to enjoy a somewhat colder day after tomorrow. There is after all no coincidence that these conflicts have a tendency to erupt during winter time.