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Russia Turns on Ukraine’s Gas Spigot. For Now.

Earlier this month, Andriy Kobolyev, board chairman of Ukraine’s Naftogaz, the country’s largest natural gas firm, told Foreign Policy‘s Keith Johnson that Russia’s Gazprom had "destroyed its image as a reliable gas supplier." In just two weeks, Gazprom’s reputation has quickly improved. Moscow and Kiev have reached a tentative deal for Gazprom to deliver 5 ...

Photo by Sean Gallup/Getty Images
Photo by Sean Gallup/Getty Images

Earlier this month, Andriy Kobolyev, board chairman of Ukraine’s Naftogaz, the country’s largest natural gas firm, told Foreign Policy‘s Keith Johnson that Russia’s Gazprom had "destroyed its image as a reliable gas supplier." In just two weeks, Gazprom’s reputation has quickly improved.

Moscow and Kiev have reached a tentative deal for Gazprom to deliver 5 billion cubic meters of gas by the end of March, enough to get Ukraine through the winter. Russia had stopped supplies to Ukraine in June; Russia said it was because Ukraine hadn’t paid its bills, while Ukraine maintained Russia was using its energy as a weapon in the crisis in eastern Ukraine.

The deal is expected to be signed Tuesday, Oct. 21.

For now, it appears as if everyone is happy. The European Union, which had pushed both sides to come to terms, now has a secure supply of gas for the winter. Russia gets $2 billion to $3 billion of the $5 billion it says it’s owed by Ukraine. And Ukrainians won’t freeze this winter.

However, the deal is only a stopgap. Kiev and Moscow will be back at the negotiating table in the spring, and history shows that gas deals between the two fall apart quickly. Gazprom and Ukraine are also still locked in battle at the International Court of Arbitration in Stockholm over the remaining money Ukraine owes Gazprom.

For now, though, the deal stands as a breakthrough at a time when leaders in Ukraine and Russia have been almost completely at odds. Read Johnson’s recent reports, "Ukraine Gas Boss: ‘Gazprom Destroyed Its Image as a Reliable Supplier’" and "Let’s Make a Deal," to get a better sense of how far both sides have come in a short time.

Earlier this month, Andriy Kobolyev, board chairman of Ukraine’s Naftogaz, the country’s largest natural gas firm, told Foreign Policy‘s Keith Johnson that Russia’s Gazprom had "destroyed its image as a reliable gas supplier." In just two weeks, Gazprom’s reputation has quickly improved.

Moscow and Kiev have reached a tentative deal for Gazprom to deliver 5 billion cubic meters of gas by the end of March, enough to get Ukraine through the winter. Russia had stopped supplies to Ukraine in June; Russia said it was because Ukraine hadn’t paid its bills, while Ukraine maintained Russia was using its energy as a weapon in the crisis in eastern Ukraine.

The deal is expected to be signed Tuesday, Oct. 21.

For now, it appears as if everyone is happy. The European Union, which had pushed both sides to come to terms, now has a secure supply of gas for the winter. Russia gets $2 billion to $3 billion of the $5 billion it says it’s owed by Ukraine. And Ukrainians won’t freeze this winter.

However, the deal is only a stopgap. Kiev and Moscow will be back at the negotiating table in the spring, and history shows that gas deals between the two fall apart quickly. Gazprom and Ukraine are also still locked in battle at the International Court of Arbitration in Stockholm over the remaining money Ukraine owes Gazprom.

For now, though, the deal stands as a breakthrough at a time when leaders in Ukraine and Russia have been almost completely at odds. Read Johnson’s recent reports, "Ukraine Gas Boss: ‘Gazprom Destroyed Its Image as a Reliable Supplier’" and "Let’s Make a Deal," to get a better sense of how far both sides have come in a short time.

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