The feud between Russia and Ukraine over natural gas prices and transit fees that has left large areas of Europe without heat seems to have entered a new and baffling phase.
Despite attempts to persuade the EU to arbitrate, the agreement reached a few days ago has collapsed (Tuesday 13 January) accompanied by the familiar complaints and countercomplaints, and over what on the face of it is a trivial issue.
Russia had agreed to resume shipments to Europe and the EU supplied monitors along the pipeline to make sure that Ukraine did not divert any gas for its own use. Nevertheless the Ukrainian pipeline was not immeditely repressurised for exports. Russia’s gas monopoly, Gazprom, ordered a single test shipment to see if it would pass through Ukraine to Europe, through a pipeline that supplies Odessa, Ukraine. But Ukrainian authorities did not want to cut supplies to their own people, and refused, and Russia again halted shipments.
But not, perhaps, very reluctantly. Although both countries stand to profit from selling fuel to Europe, and would seem therefore to have a powerful motive for settling the dispute, there is some speculation among political experts, whose suspicions have been aroused by the highly technical nature of the Russian objections, that neither side wants to settle, because in reality the two sides are not fighting over gas or gas payments but about ideology. Specifically, this implies that Russia is pressurising the Ukrainian authorities into abandoning their pro-Western course – a political shift that started with the 2004 “Orange Revolution” – and returning to the conventional role of a former colony in the Russian sphere of influence. If this is the case, it also connects to Russia’s sabre-rattling over the Ukraine’s potential membership of Nato.
This time, though, the fallout from the dispute is affecting Europe, with hundreds of thousands of people in southeastern Europe living without heat for a week and factories shutting down in several countries.
A slightly wilder speculation reputedly among some EU officials holds that the two nations might be colluding to bring about chaos on energy markets and drive up the price of gas, their common high-earning business venture. Bloomberg News has reported that the cutting off had caused spot prices in Europe to rise to a three-year high of $8.60 per million BTU’s, compared with $5.52 in the USA, a useful hedge against the expected fall during 2009..