Russia halting gas supplies to Ukraine

Tensions between Russia and Ukraine escalated Wednesday as Ukraine stopped buying Russian natural gas and closed its airspace to its eastern neighbor.

Gazprom boss Alexei Miller said Ukraine’s state energy firm Naftogaz had used up all the gas it had paid for and “no new upfront payment has been made”.

Ukrainian Prime Minister Arseniy Yatsenyuk told a televised cabinet meeting that the latest ban was justified because “Russia might use Ukrainian airspace to stage provocations”.

But dozens of interviews conducted by Reuters, while only providing a partial snapshot of public opinion, suggest the crisis is unlikely to provoke widespread protests or prompt a majority to question the wisdom of voting in a referendum a year ago to join Russian Federation and break with Ukraine.

Ukraine’s “refusal to buy Russian gas threatens a safe gas transit to Europe through Ukraine and gas supplies to Ukraine consumers in the coming winter”, Mr Miller said. Supplies restarted after the European Commission brokered an interim deal between the former Soviet allies.

Russia briefly cut gas supplies to Ukraine in July and in June 2014 as Russian-backed separatists and Ukrainian forces clashed in southeastern Ukraine after the ouster of President Viktor Yanukovych.

The Nord Stream extension to deliver increased volumes of gas straight to Germany could have serious consequences for Kyiv and European Union nations, the letter said. The suspension will remain in place until the company receives a prepayment from Ukraine’s Naftogaz, he said.

Kyiv said it did not need any more Russian gas for now and would guarantee the transit of piped Russian gas bound for Europe.

Disputes between the governments in Moscow and Kyiv flared up this week after power supplies to Crimea from Ukraine halted after sabotage on the cables to the Russian-annexed peninsula. Fitch Ratings has upgraded the Long-term foreign currency Issuer Default Rating (IDR) of Ukraine’s national oil and gas company, Naftogaz, to “CCC” from “CC”, the agency reported on Thursday.

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