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Shale Productivity Is Reaching Its Limit

Shale Productivity Is Reaching Its Limit

Shale producers have been increasing…

Russia Seizes Ukraine Navy Ships Off Crimea

Russia seized on Sunday three Ukrainian ships near Crimea, in an incident that risks spilling to a wider conflict between the two countries and to exacerbate the disputes between Moscow and Kiev over oil and gas resources and infrastructure.

Russia—which annexed Crimea in 2014, for which the U.S. and the EU imposed sanctions on Moscow—said on Monday that three Ukrainian vessels had violated its state border in waters near Crimea early on Sunday. Russia used weapons “to force the Ukrainian warships to stop,” Russian media quoted a statement from the Russian Federal Security Service (FSB) as saying.

All three vessels were detained in the incident, in which three Ukrainian servicemen were wounded, according to Russia.

Ukraine, for its part, says that it had informed Russia about the plans for the ship movements and said that the seizing of the vessels was “another act of armed aggression” by Russia, as quoted by the BBC.

The Sunday incident is the first open conflict between Russian and Ukrainian militaries in recent years. Tensions have been rising lately over the access to the Kerch Strait, where the incident took place, and the Sea of Azov.

Russia and Ukraine are disputing not only land and maritime territories, but also the rights to oil and gas resources in the area. The two countries also continue their years-long dispute over gas deliveries and payments.

Related: Plunging Oil Prices Weigh On Saudi Bonds

Russia is disputing the jurisdiction of The Hague-based Permanent Court of Arbitration in the Russia-Ukraine dispute over rights to oil and natural gas resources off Crimea. Ukraine served the Russian Federation with a claim at the Permanent Court of Arbitration in September 2016, referring to a dispute between the two countries over the coastal state rights in the Black Sea, Sea of Azov, and Kerch Strait. Ukraine claims that it has the right to resources in those areas, which were violated by Russia with the annexation of Crimea. Russia is contesting the jurisdiction of the court in the dispute, saying that the arbitrators in The Hague-based court shouldn’t rule on a case that Russia says is about Ukraine’s “claim to sovereignty over Crimea.”

Russia’s Gazprom and Ukraine’s Naftogaz are also locked in a bitter dispute over payments for gas supply, with a court battle still going on. Gazprom appeals a ruling to pay Naftogaz US$2.56 billion for failing to supply Ukraine with the agreed amount of natural gas over a period of several years and also for failing to pay the full transit fees for the gas it did pump in that direction.

By Tsvetana Paraskova for Oilprice.com

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  • Uncle Sam on November 26 2018 said:
    Kirsch Strait is a face saving measure. The Red Army is beat like a drum in Donbass. Putin is foolish to make war with Ukraine. President Trump can drop the price of Russian oil to $40/bbl. The Red Army is entirely financed by oil sales. The Russian people are suffering cold and hungry and an extremely cold winter is predicted.

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