Russia gas company Gazprom shut off supplies to Ukraine, which could affect Europe. Russia provides gas to Europe and the majority of the pipelines flow through Ukraine.
“Regarding transit risks (to the EU), they exist and they are not insignificant,” Gazprom CEO Alexei Miller told a news conference.
Gazprom spokesman Sergei Kupriyanov said the company will still deliver gas to Europe and Ukraine’s state company Naftogaz “is required to transit it.” Miller agreed and “implied that Kiev may take some of those supplies for their own use.” If Ukraine does this, Miller said Gazprom will not be required to make up the difference.
After parliament ousted Russia-backed President Viktor Yanukovych in February, Russia and Gazprom started to use gas as a political tool to keep control of Ukraine. Gazprom threatened to shut off Ukraine’s gas and even though the company told Europe their supply would be okay, four ambassadors from European countries asked House Speaker Rep. John Boehner (R-OH) to allow America to export natural gas to Europe. Also, Europe told Ukraine it would help with any gas supplies, which would put a dent into their supplies and backups.
In April, Russian President Vladimir Putin told Europe if they do not help pay off Ukraine’s debt their gas and energy supplies could be in jeopardy. The EU fired back and said the countries would find energy in other places. Putin backed down a bit, but Europe is still worried, which is why the Energy Commission mediated the talks.
The EU pushed Ukraine to put in the offer of $326, even though Kiev thought the price was too much. In December, Gazprom provided Yanukovych with a discount price of $268 per 1,000 cubic meters, but scrapped the price after he was ousted and raised it to $468 per 1,000 cubic meters. At 10AM Moscow time on Monday, Gazprom cut all gas to Ukraine.
In 1981, the CIA told President Ronald the US must warn Europe not to rely on the then-Soviet Union for gas and energy supplies. The US knew Russia would use energy as a political tool in the future.