• 2 hours OPEC, Russia Said To Announce Oil Pact Extension On Nov 30
  • 5 hours Wintershall And LetterOne In Talks For $12B Oil, Gas Merger
  • 7 hours India Exempts State Oil Firms Mergers From Competition Approval
  • 9 hours Turkey Targets $5B Investment In Wind Energy By End-2017
  • 11 hours Weatherford Looks To Sell Assets To Ease Some Of $8B Debt
  • 12 hours OPEC Set To Move Fast On Cut Extension Decision
  • 14 hours Nigeria Makes First Step Away From Oil
  • 1 day Russia Approves Profit-Based Oil Tax For 2019
  • 1 day French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 1 day Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 1 day Oil Production Cuts Taking A Toll On Russia’s Economy
  • 1 day Aramco In Talks With Chinese Petrochemical Producers
  • 2 days Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 2 days Maduro Names Chavez’ Cousin As Citgo Boss
  • 2 days Bidding Action Heats Up In UK’s Continental Shelf
  • 2 days Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 3 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 3 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 4 days Whitefish Energy Suspends Work In Puerto Rico
  • 4 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 4 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 5 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 5 days ConocoPhillips Sets Price Ceiling For New Projects
  • 7 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
Is U.S. Energy Independence Realistic?

Is U.S. Energy Independence Realistic?

The recent IEA report shocked…

Tesla Completes World’s Largest Battery

Tesla Completes World’s Largest Battery

In a milestone for lithium…

Russia Threatens to Cut Gas Discounts to Ukraine

Russia Threatens to Cut Gas Discounts to Ukraine

The ouster of Ukrainian President Viktor Yanukovych and the new pro-Western interim government prompted a severe reaction from Russian President Vladimir Putin. Russia sent its military to occupy Crimea and to secure its naval base at Sevastopol. The world is watching Russia’s next move in Ukraine on March 3rd as global markets gyrate up and down.

Russia largely controlled Yanukovych due to the discounted gas provided by Gazprom. Ukraine is highly dependent on Russian gas to fuel its economy, and at cheap prices, Yanukovych increasingly looked towards Moscow. With the change in government, Gazprom has threatened to end the discounts, which will imperil Ukraine’s already crumbling economy. Gazprom is demanding $1.55 billion it says Ukraine owes. If Ukraine doesn’t pay, Gazprom will increase its rates.

Russia has demonstrated a willingness in the past to curtail natural gas exports to gain political leverage over its adversaries. As a supplier of about one-third of Europe’s imported natural gas, any imbroglio in Ukraine that cuts off supplies of natural gas will lead to supply disruptions in Western Europe as well, as Ukraine is a vital transit country for Russian gas. Natural gas prices in Germany were already up 8.1% and they were up 10% in the U.K.

Related Article: There's no Easy Fix to Ukraine's Energy Dilemma

However, Russia is also hurting from its invasion as the markets tumbled on March 3rd. Gazprom’s shares were off 17%. The Ruble and the Moscow stock exchange were also sharply down.

The agreement between Ukraine and Russia made by Yanukovych ends in March, and while Gazprom previously said that those discounts could be extended beyond that date, the change in government has prompted a reversal on Gazprom’s part. “It seems without payments for gas and fulfillment of commitments, Ukraine may not keep its current gas price discount,” Gazprom spokesman Sergei Kurpriyanov said, according to Bloomberg.

By Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News