Medvedev Cuts Ukrainian Gas Supply in Half

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Medvedev Cuts Ukrainian Gas Supply in Half

Gazprom has halved Ukraine’s natural gas supply and taught Europe three major lessons.

Dmitry Medvedev may play a role as Vladimir Putin’s friendlier face, but he will also faithfully continue to implement the aggressive foreign policy of the Putin regime.

On Monday, only hours after becoming Russia’s president-elect, Medvedev—as chairman of Gazprom—cut natural gas supplies to Ukraine by 25 percent. After Ukrainian state gas company Naftogaz stated that it could only guarantee the uninterrupted transit of gas to European consumers if Ukraine’s energy security remained unthreatened, Medvedev cut gas supplies by another 25 percent.

Gazprom’s stated reason for the cuts was that Ukraine owed the company $600 million in back pay. Ukrainian President Viktor Yushchenko reached a deal on the payment issue with Putin back on February 12. Before the deal was ratified, however, Ukrainian Prime Minister Yulia Tymoshenko traveled to Moscow to meet with Putin and contest the fact that Ukraine had to work through an intermediate Russian company instead of with Gazprom itself. It is not known what exactly happened in Moscow, but Putin was not pleased, and Tymoshenko came home to Ukraine bearing a $1.1 billion gas debt.

Yushchenko warned on Monday that this conflict could very well escalate into a new “gas war” with Moscow—reminiscent of Russia’s gas cuts to Ukraine in 2006.

The timing of these events is intriguing. Even though Russia and Ukraine have been arguing over this back-pay issue for six months, Moscow has not chosen to turn the gas off until now. By waiting for this precise moment, Putin, Medvedev and their Kremlin cohorts have made three powerful points with one drastic, yet simple action.

First, by choosing to cut the gas within hours of Medvedev’s election, Moscow has shown Europe and the world that Russia’s new president will pursue the same aggressive foreign policy that has defined Putin’s Russia for the past eight years.

Second, with Ukrainian leadership currently considering both nato and EU membership, the Russians have reminded the Ukrainians there could be serious consequences to turning their back on mother Russia.

Third, Russian gas cuts to Ukraine are a way of dangling a threat over Europe’s head after the humiliation Moscow endured when Germany and most of the nations of Europe recognized Kosovo against Russia’s will.

The European Union gets 80 percent of its natural gas from Russia. A full 25 percent of the EU’s natural gas supply flows into the bloc through pipelines running across Ukraine. The issue that must be worrying European leaders is that the effects of gas cuts to Ukraine could reverberate into Europe.

Gazprom has assured that the cuts are only to Ukraine, but that assurance is not very reassuring: Gazprom said the same thing regarding the 2006 gas cuts to Ukraine, and Europe was definitely affected. Ukraine’s Naftogaz has indicated that it would dip into gas coming down the pipeline meant for Europe if it felt the Ukrainian security sector was in jeopardy.

This scenario is almost undoubtedly exactly what Russia wants. After the first gas cut on Monday, Ukrainian officials seemed confident that they would not have to take any gas meant for Europe. This is when Russia cut the gas supplies another 25 percent. More gas cuts have been threatened as Russia tries to make a point to Europe.

Stratfor reported, “The country to watch now is Germany. When the Russians turn the screws on Ukraine, the Germans feel the pain. In addition to having 30 percent of its natural gas supplies from Russia transit Ukraine, Germany must fulfill its role as the regional heavyweight capable of standing up to an aggressive Russia hovering to the east” (March 4).

German Chancellor Angela Merkel will be in Moscow this Saturday to meet with both Putin and Medvedev. Russian political and economic aggression is forcing Berlin to take a stance against Moscow.

Berlin and Moscow are increasingly coming into conflict as Europe and Russia rise to superpower status. Ukraine will continue to be a key issue of contention between these two emerging empires.

Neither power can afford the devastating effects of military conflict with the other, so watch for Germany and Russia to temporarily put aside their differences another way—namely through a far-reaching non-aggression treaty. For more information on a coming pact between the EU and Russia, read “Russo-German Pact Imminent.”