Tuesday, March 11, 2014

Gas -- The Ukraine and Russia

By Micah Halpern
I've Been Thinking:

The UN Security Council met again yesterday - and Russia was feeling the isolation. Everyone, even China, spoke against the Russian land grab in Crimea and the future referendum scheduled for May 16.

The EU is going to meet next week, on March 17, and they will be talking about increasing their pressure on Russia to pull out.

But Russia still has a few cards still to play.

Gazprom, the Russian gas company, supplies the Ukraine with natural gas. They are demanding payment for February which comes to $1.3 billion. Gazprom is the largest natural gas extractor and supplier in the world.
Russia says that if they do not get paid they will not deliver gas in March.

There's more. Six EU countries receive 100% of their natural gas from Russia. 75% of Russia's natural gas export goes to the EU. That means that Russia exerts tremendous influence on EU decisions.

The EU and the West can try to flex their muscles but it should be clear who holds the better cards in this game.


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