Category: Ukraine

OAO Gazprom (OGZD) ’s threat to end natural gas discounts for Ukraine adds to the financial burden on the near-bankrupt government in Kiev and makes Europe’s energy supply part of the escalating crisis. Russia ’s gas-export monopoly said on March 1 it may end last year’s agreement to supply Ukraine at a cheaper rate unless it’s paid $1.55 billion owed for fuel. It’s the first time since the otherthrow of pro-Moscow president Viktor Yanukovych last month that Russia has directly used its position as Ukraine’s dominant energy supplier to pressure the new regime. Vladimir Putin , who has permission from lawmakers to deploy troops to Ukraine, has repeatedly used gas to strong-arm his western neighbor, cutting off supplies twice since 2006 over payment disputes. Because Ukraine hosts a network of Soviet-era pipelines that carry more than half of Russia’s gas exports to the European Union, any […]

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The U.S. and its European allies vowed Sunday to isolate Russian President Vladimir Putin and punish his nation’s economy, demanding he withdraw what they called an occupation force from Ukraine’s Crimean region. Washington began canceling joint economic and trade initiatives with Moscow, including preparations for the summit of the Group of Eight leading nations scheduled to be held in Sochi, Russia, in June. Senior U.S. officials said the administration was also beginning discussions with Congress on implementing targeted economic and financial sanctions on Russian companies and leaders if the Kremlin didn’t begin pulling back from Crimea. "Russian forces now have complete operational control of the Crimean peninsula, some 6,000-plus airborne and naval forces, with considerable materiel," a senior official said. "There is no question that they are in an occupation position in Crimea, that they are flying in reinforcements, and they are settling in." Officials in Washington and around […]

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Defending Moscow’s December 18, 2013 agreement to provide Ukraine with an aid package estimated at about $15 billion, and cheaper natural gas through discounts and “gas debt forgiveness” estimated as able to save Ukraine $7 bn in one year, Vladimir Putin said the decision to invest $15 bn in ‘brotherly slavic’ Ukraine, and grant the gas discount was “pragmatic and based on economic facts”. At the time, the “investment” in Ukraine was already conditional – not only on the political issue of Ukrainian loyalty to Moscow – but on Ukraine complying with previous longstanding, often revoked, modified or extended commitments to repay gas debts dating from as far back as the early 1990s.  In December, Russia’s Finance minister Anton Siluanov said payment of the “aid or investment” funds to Ukraine, in tranches of about $2 bn each, would need Ukraine making a serious […]

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LONDON—As tensions ratchet higher in Ukraine’s Crimean peninsula, the country’s port operators, international shipping executives and European energy officials reported few disruptions to the vast commodities infrastructure that has made the country a linchpin in the global economy. Ukraine is a key supplier of wheat and corn, and it exports metals and minerals to Europe, Russia and beyond. Ukrainian farms rank as the world’s fourth and fifth largest exporters of corn and wheat, respectively. Much of that feeds African and Mideast markets. Its mills make it the world’s fifth-largest steel exporter. Ukraine also serves as a critical gateway for Russian natural gas to Western Europe. About a fifth of Europe’s annual gas needs flow across the country. Together with Russia, Ukraine forms the northern coast of the Black Sea, a major shipping route for energy, agricultural products and metals. The current unrest in the Crimean peninsula , which juts […]

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Ukrainian officials failed to turn up to sign a deal Wednesday that could open a natural gas supply route via Slovakia, according to several people familiar with the situation, raising concerns that Kiev was walking away from an agreement the European Union spent months brokering. The gas deal would have opened up a major gas supply route to Ukraine that could have significantly reduced Kiev’s dependence on Russian supplies. The EU had hoped the deal would encourage authorities in Kiev to sign onto an EU trade and political deal. Though President Viktor Yanukovych’s government said two weeks ago that it was putting that trade pact on hold, the gas agreement remained on the table. Ukraine has for years sought cheaper gas from Russia without success, but importing gas from the EU via Slovakia would give it access to large volumes at what Ukraine says would be a lower price. […]

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