The Russian energy Giant Gazprom has cut three of four of its export pipelines. These are the pipelines through which Europe receives its gas supplies and hence such an act has had a significant impact on a number of nations.

Gazprom places the blame on Ukraine for giving rise to the current situation. The deputy chief of Gazprom, Alexander Medvedex said “Ukraine is in obvious breach of obligations as a transit country.”

Following the reduction of gas supply at least nine countries reported to be experiencing a shortage in their gas supply through the Ukraine channel. The countries that have been impacted include Austria, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Germany, Greece, Hungary, Romania and Turkey. These nations however did not blame either side for the problem but expressed their concerns for the issue.

Ukraine has been receiving natural gas from Russia for many years but this latest twist in their dealings is becoming grimmer by the day. Ukraine’s natural gas supply was cut off last week when the country failed to meet the dead line for past payment. Ukraine on the other hand has denied that it owes the money that Russia is demanding. At the moment Ukraine is being able to meet its needs due to supplies decked up in the storage facilities.

A meeting between the two countries has been scheduled for Thursday where they will discuss the issue at hand. Gazprom has stated that it will be filing suit against Ukraine accusing the country of siphoning gas from the export pipelines.

The Romanian and Bulgarian Ministry of Economy and Energy have reported that their countries have experienced a 75% reduction in gas supply as a direct result of the dispute. Turkey is one of the nations that has been severely impacted by the dispute as the supply of gas that reached it through Ukraine has been completely cut off. A number of countries have over 50% percent of their gas supply cut off due to the Russian blockade whereas some nations like Greece and Turkey are not receiving any gas at all.

Russia is the supplier of up to one fourth of the natural gas that is used across Europe. This gas is delivered to the rest of Europe through Ukraine’s gas pipelines. The suspension of gas to Ukraine is going to have its repercussions on the rest of Europe as well.
 
A similar suspension did take place two years back when Russia blocked some of its gas supply to Ukraine. Countries as far as Italy suffered from fuel shortages as a result. The incident brought to light Europe’s utter dependence on energy controlled by Russia.

Russia wanted to increase the rate at which it was supplying gas to Ukraine in the upcoming year. It indented on collecting over $2 billion in debt from Ukraine. This has been the major cause of the current dispute. The diplomatic relations between the two nations have been strained in the past few years as the Russian government is not very fond of the pro-Western government of Ukraine.

The announcement of the collapse of the talks that were being conducted between the two sides was made by the chief executive of Russia’s state controlled gas company Gazprom. He said “All responsibility for the situation rests on the Ukrainian side.” 

The state run gas monopoly had issued its warning to Ukraine more than two weeks ago. It had asked the country to pay off its debts and sign a new deal for the upcoming year by Wednesday. Ukraine failed to meet these demands following which Russia made the announcement of suspending the supply of natural gas.

The global economic crisis has struck both these countries hard and both are longing for funds. This could mean that the current suspension could last a lot longer than the three day suspension that took place back in 2006. Ukraine is currently on the verge of an economic meltdown whereas Russia itself has been damaged due to the falling energy prices. It is for Ukraine now to make a call or suffer the consequences the implications of which would be felt all across Europe.