The Russian - Ukrainian Gas Dispute

Matthew Lebovitz
November 12, 2014

Submitted as coursework for PH240, Stanford University, Fall 2014


Fig. 1: Russian Gas Pipelines to Europe. (Source: Wikimedia Commons)

On March 18, 2014, Russian President Vladimir Putin signed laws to reunite the Republic of Crimea and the city of Sevastopol with the Russian Federation. Before this date, the Crimean Peninsula was internationally recognized as part of Ukraine. Putin's annexation of Crimea was condemned worldwide. The North Atlantic Treaty Organization (NATO) denounced the act, claiming that "Russia's aggression against Ukraine challenges our vision of a Europe whole free and at peace". [1] Former Soviet leader Nikita Khrushchev transferred the Crimean peninsula to Ukraine as a gift. Ukraine declared its independence of the Soviet Union with a 90% vote in December 1991, and three years later, Russia committed to respect Ukraine's territorial independence as the Soviet Union collapsed. However, in an address to his nation this past March, Putin claimed Ukraine's control of Crimea was a historic injustice and the peninsula's territory belonged to Russia. [2] These actions have had many consequences in Europe and worldwide and have complicated an already intricate relationship between Russia, Ukraine, and the rest of the world. Russia's recent military actions have complicated a historic natural gas dispute between Ukraine and Russia that has had implications for many other European nations.

Summary of Historical Background of Gas Disputes

Since the 1990's, a number of conflicts have arisen between Ukrainian gas company Naftohaz Ukrayiny and Russian gas company Gazprom over natural gas. These disputes have affected many European nations as many of these countries depend on Russia for gas, which happens to be transported through pipelines that run through Ukraine. This past year, Russia supplies approximately a third of the natural gas used by the European Union (EU), with approximately half of that gas coming through pipelines on Ukrainian soil. [3] In January of 2006, Russia briefly cut supply off its Ukraine's natural gas. Moscow claimed the reasons were economic, but Kiev refuted this notion, instead believing it was heavily politicized. [4] A resolution was reached shortly after. However, the conflict was never fully resolved, culminating in 2009 when Russia cut off Ukraine's gas supplies again over unpaid debts and price disputes. The 2009 gas dispute led to shortages of gas in multiple Eastern European countries. The conflict was resolved later that year on a ten- year gas deal between Russia and Ukraine, but that deal has again failed to hold up recently.

Russia-Ukraine Gas Dispute of 2014 and Current Implications

In April 2014, for the third time since 2006, Putin declared in an open letter Europe faced an increased risk of another gas shortage if Ukraine did not pay its debt of around 2 million US dollars. In June 2014, Gazpron cut off its natural gas supplies to its neighboring country. Even though disputed by Russia, the Ukrainian prime minister, Arseniy P. Yatsenyuk believes that the most recent events are politically tied to the Russia's annexation of Crimea and its military aggression towards Ukraine. Yatsenyuk stated, "This is not about gas, this is a general plan for the destruction of Ukraine". [5] As of October 2014, no resolution has been made on the gas dispute with winter rapidly approaching.

Future Implications

Both Russia and the EU have made efforts to bypass the unreliable Ukraine. Due to the Nord Stream pipeline, Russia's only transports 53% of its natural gas to Europe through Ukrainian pipelines compared to 80% in 2009. However, because of the political crossfire with Ukraine, Gazprom was forced to delay its $45 billion South Stream project, slated to open in 2018. This project would have almost completely shut out Ukraine as a transit company for gas. Russia has been reluctant to cooperate with EU regulations. [6] With the ongoing conflict with Ukraine and Russia's lack of agreement with the rest of its European nations, any concrete resolution to this extremely complex conflict looks unlikely in the near future.

© Matthew Lebovitz. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] "Ukraine Crisis: Nato Suspends Russia Co-Operation," BBC News, 2 Apr 14.

[2] S. Meyers and E. Barry, "Putin Reclaims Crimea for Russia and Bitterly Denounces the West," New York Times, 18 Mar 14.

[3] D. Shukman, "How does Europe wean itself off Russian gas?," BBC News, 1 May 2014.

[5] "Ukraine Profile," BBC News, 4 Nov 14.

[6] N. MacFarquhar, "Gazprom Cuts Russia's Natural Gas Supply to Ukraine," New York Times, 16 Jun 14.

[7] "EU-Moscow Row Over South Stream Gas Pipeline," BBC News, 9 Jun 14.