Russia Resumes European Gas Shipments Through Ukraine

On Monday, Russia and Ukraine both signed an agreement with the European Union which allows for the resumption of natural gas supplies to Europe. The agreement allows international monitors to be stationed at key pipeline checkpoints in Russia and Ukraine to verify that all gas intended for Europe gets through Ukraine.

This agreement only allows for the transit of Russian gas to European consumers. It does not resolve the existing price dispute between Ukraine and Russia.

An article in yesterday’s Huffington Post poses an interesting theory about the problem between the two countries. The argument goes back to Ukraine getting gas allocations from Soviet planners and expected the same after independence. When independent Ukraine failed to pay Russia for its gas, the supply was shut down, but Kyiv simply diverted gas intended for the rest of Europe.

The article continues by noting that the dispute is more an issue of economics for both countries than Russia wielding a heavy fist. Further, Russia is facing a budget deficit due to falling gas prices while Ukraine’s economic crisis makes it difficult to pay for its gas deliveries.


Nice story and blog, keep it up.