At 10 am on Monday, June 16, 2014, Gazprom, a Russian gas monopoly, cut off supplies of gas to Ukraine. This is the third time in the last ten years when Gazprom has tried to use a cut-off to force the Ukrainian government to accept a deal it did not want to accept. In the previous two cut-offs —in January 2004 and January 2009, that is, in the middle of bitter cold winters—Ukraine bowed to the pressure and agreed to unfavorable contracts with high prices, tough clauses, and heavy penalties. Each time, Russia used Gazprom and energy prices as a political instrument to pressure pro-Western governments in Ukraine. Although the current cut-off is motivated by the same political factors, the outcome could be different this time. In a nutshell, Gazprom wants to sell gas to Ukraine at $485 per thousand of cubic meters. Ukraine insists on the price of […]