Russia’s Gas War

Five months have gone by since Russia attacked Georgia and surprised many. At that time, analysts spoke about a quest for political power and how the Kremlin needed to re-affirm its old fashioned supremacy over the former soviet satellite.

Now – according to many pundits – the Russian government is seeking money, rather than political power, when dealing with Ukraine in what they call the “Gas war”.

“We are struggling with the consequences of the world economic crisis, but it does not mean that Russian taxpayers have to sacrifice in order to keep Ukrainian production alive,” said Dmitry Peskov, Putin’s mouthpiece.

To put it simply: there is a deal between the Naftogaz Ukraini and the Gazprom according to which the Russians have to sell natural gas to the Ukrainians for 180 dollars every 1000 cubic-meters. With the present economic downturn, though, energy prices are tumbling downwards; and the influence of Moscow as well as its immense reserves of gas is decreasing.

Gazprom now wants all is money back at once. In fact, Ukraine has benefited from a loan of about 2000 billion dollars from Russia and even Kiev has already paid 1500 back; this remains a powerful advantage that Moscow is using in its favor.