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Page added on January 14, 2015
Russia Cuts Off Ukraine Gas Supply To 6 European Countries
Vladimir Putin ordered the Russian state energy giant Gazprom to cut supplies to and through Ukraine amid accusations, according to The Daily Mail, that its neighbor has been siphoning off and stealing Russian gas. Due to these “transit risks for European consumers in the territory of Ukraine,” Gazprom cut gas exports to Europe by 60%, plunging the continent into an energy crisis “within hours.” Perhaps explaining the explosion higher in NatGas prices (and oil) today, gas companies in Ukraine confirmed that Russia had cut off supply; and six countries reported a complete shut-off of Russian gas. The EU raged that the sudden cut-off to some of its member countries was “completely unacceptable,” but Gazprom CEO Alexey Miller later added that Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey; and Russian Energy Minister Alexander Novak stated unequivocally, “the decision has been made.”
Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey, a surprise move that the European Union’s energy chief said would hurt its reputation as a supplier.
The decision makes no economic sense, Maros Sefcovic, the European Commission’s vice president for energy union, told reporters today after talks with Russian government officials and the head of gas exporter, OAO Gazprom, in Moscow.
Gazprom, the world’s biggest natural gas supplier, plans to send 63 billion cubic meters through a proposed link under the Black Sea to Turkey, fully replacing shipments via Ukraine, Chief Executive Officer Alexey Miller said during the discussions. About 40 percent of Russia’s gas exports to Europe and Turkey travel through Ukraine’s Soviet-era network.
…
Sefcovic said he was “very surprised” by Miller’s comment, adding that relying on a Turkish route, without Ukraine, won’t fit with the EU’s gas system.
Gazprom plans to deliver the fuel to Turkey’s border with Greece and “it’s up to the EU to decide what to do” with it further, according to Sefcovic.
Which, as The Daily Mail reports, has led to a major (and imminent) problem for Europe…
Russia cut gas exports to Europe by 60 per cent today, plunging the continent into an energy crisis ‘within hours’ as a dispute with Ukraine escalated.
This morning, gas companies in Ukraine said that Russia had completely cut off their supply.
Six countries reported a complete shut-off of Russian gas shipped via Ukraine today, in a sharp escalation of a struggle over energy that threatens Europe as winter sets in.
Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments from Russia through Ukraine.
* * *
As Bloomberg goes on to note, Gazprom has reduced deliveries via Ukraine after price and debt disputes with the neighboring country that twice in the past decade disrupted supplies to the EU during freezing weather.
“Transit risks for European consumers on the territory of Ukraine remain,” Miller said in an e-mailed statement. “There are no other options” except for the planned Turkish Stream link, he said.
“We have informed our European partners, and now it is up to them to put in place the necessary infrastructure starting from the Turkish-Greek border,” Miller said.
Russia won’t hurt its image with a shift to Turkey because it has always been a reliable gas supplier and never violated its obligations, Russian Energy Minister Alexander Novak told reporters today in Moscow after meeting Sefcovic.
“The decision has been made,” Novak said. “We are diversifying and eliminating the risks of unreliable countries that caused problems in past years, including for European consumers.”
* * *
That helps to explain today’s epic meltup in NatGas futures…
* * *
“They [the Russians] have reduced deliveries to 92million cubic metres per 24 hours compared to the promised 221million cubic metres without explanation,” said Valentin Zemlyansky of the Ukrainian gas company Naftogaz.
“We do not understand how we will deliver gas to Europe. This means that in a few hours problems with supplies to Europe will begin.”
* * *
Check to you Europe (i.e. Washington)… Because it’s getting might cold in Europe…
(and bear in mind the consequences of cold, pissed off Europeans in the past).
34 Comments on "Russia Cuts Off Ukraine Gas Supply To 6 European Countries"
Apneaman on Wed, 14th Jan 2015 7:23 pm
Yabut, Just yesterday the economist was telling us….
Why Europe no longer fears the Russian gasman
http://peakoil.com/publicpolicy/why-europe-no-longer-fears-the-russian-gasman
Makati1 on Wed, 14th Jan 2015 7:37 pm
Apneaman: Yep! Blowback is bitch. Freeze EU! LMAO
rockman on Wed, 14th Jan 2015 9:26 pm
The argument was that with lower oil export income Russia couldn’t afford to give up any of its NG export income. Which might better explain this new export restriction: Russia can’t afford losing a ruble of that NG cash flow.
What I’ve never understood is why Russia doesn’t sell its NG like the Rockman and every other US NG producer: at our tap to the NG transmission companies pipeline. Since the Rockman gets paid for every cubic foot of NG that goes thru his meter he doesn’t care what makes it thru to the consumers. And maybe that’s the plan behind this latest move: EU buyers pay Russia for the NG that goes thru its meters before it goes into the Ukrainian pipeline system. And if all that volume does come out at the other end that’s between the EU buyers and the Ukraine.
Problem solved.
dissident on Wed, 14th Jan 2015 10:20 pm
The Daily Fail article is from 2009.
BTW, It was Yuschenko who closed the valves in 2009.
theedrich on Thu, 15th Jan 2015 4:35 am
Once again, politics trumps economics.
J-Gav on Thu, 15th Jan 2015 5:57 am
I guess it was only going to be a matter of time, eh?
Davy on Thu, 15th Jan 2015 7:01 am
If you play with fire you get burned. This applies to the West, Russia, and the rest of the global world. Black Swans like this spread contagions. In today’s financial and energy world that is in stable disequilibrium this is absolutely the worst kind of disruption. It could and may destroy stability and lead to who knows what.
This may turn out to be a bribe request from Russia. I do not blame Russia one bit and we have suspected multiple times here on PO that this is inevitable as this Ukrainian situation spirals downward. This was a known Black swan that was ignored. It is too early to tell where this goes but the conclusion may be war or a collapsed BAU. This is a region of the world TBTF. The foundational commodities of oil and gas production and delivery in this region TBTF.
This is a chance for the world to pull back from disaster or this is the beginning of the end for BAU. I feel it is that serious. Let us hope this will be a pullback period of mending bridges and acceptance of the truly dangerous situation we are in across the board. There is in reality no future for BAU but there is a need for BAU support. All delocalized locals depend on a functioning global BAU. The cascade of failing locals will culminate in the end for all.
GregT on Thu, 15th Jan 2015 9:06 am
Ukraine needs natural gas. The Russians have natural gas. Ukraine made her choice between Russia and the EU. The EU has no gas to offer Ukraine, and Ukraine is still indebted to Russia for not paying her previous gas bills. I wonder? What could possibly go wrong?
The Guardian, Sunday 22 September 2013 14.23 BST
“Ukraine’s EU trade deal will be catastrophic, says Russia”
“Kremlin claims neighbouring state faces financial ruin and possible collapse if integration agreement goes ahead”
“We don’t want to use any kind of blackmail. This is a question for the Ukrainian people,” said Glazyev. “But legally, signing this agreement about association with EU, the Ukrainian government violates the treaty on strategic partnership and friendship with Russia.” When this happened, he said, Russia could no longer guarantee Ukraine’s status as a state and could possibly intervene if pro-Russian regions of the country appealed directly to Moscow.
“Signing this treaty will lead to political and social unrest,” said the Kremlin aide. “The living standard will decline dramatically … there will be chaos.”
http://www.theguardian.com/world/2013/sep/22/ukraine-european-union-trade-russia
Heads should roll. The US State Department should be tried in an international court for being in direct violation of the Budapest Memorandum.
Sadly, the international court is also now corrupt, as is the EU, and the UN.
andya on Thu, 15th Jan 2015 9:44 am
The whole article is a crock of shit. I can’t believe ZH did this.
GregT on Thu, 15th Jan 2015 9:57 am
Really Andya?
How do you figure?
https://www.google.ca/?gfe_rd=cr&ei=MOO3VOm5EK_X-APKsYDwAg&gws_rd=ssl#q=russia+cuts+off+gas
Kenz300 on Thu, 15th Jan 2015 10:01 am
Russia has never been and will never be a reliable partner……. the sooner Europe moves to diversify its energy resources and suppliers the better.
Seems like local energy production using local labor will help to solve two problems in Europe, energy and unemployment.
Wind, solar, wave energy and geothermal can all be produced locally. It is time to move away from the large centralized energy producers and use a more local distributed model of energy production.
Utility-scale Solar Has Another Record Year in 2014
http://www.renewableenergyworld.com/rea/news/article/2014/12/utility-scale-solar-has-another-record-year-in-2014
Kenz300 on Thu, 15th Jan 2015 10:15 am
The transition to safer, cleaner and more reliable sources of energy continues.
“GDF Suez SA plans to double renewable power production capacity in Europe over the next decade as the utility shifts its focus away from developing more historic natural gas and nuclear energy sources in the region.”
“GDF Suez wants to raise renewable output capacity in Europe to 16,000 megawatts by 2025 from almost 8,000 megawatts in mid-2014, it said.
Utility GDF Suez Plans to Double European Renewable Capacity by 2025”
http://www.renewableenergyworld.com/rea/news/article/2015/01/utility-gdf-suez-plans-to-double-european-renewable-capacity-by-2025
GregT on Thu, 15th Jan 2015 11:28 am
Kenz300 said:
“Russia has never been and will never be a reliable partner……. ”
Without the Russians Kenz, we would all be speaking German right now.
marmico on Thu, 15th Jan 2015 12:39 pm
The whole article is a crock of shit. I can’t believe ZH did this.
I second that, andya. It’s just another example of the nutters on this board being duped.
andya on Thu, 15th Jan 2015 1:24 pm
Because the Daily Mail article is dated 2009, this is 6 year old news, portrayed as current events, total crock of shit.
My opinion of PO and ZH has dropped a notch.
SugarSeam on Thu, 15th Jan 2015 1:34 pm
Yeah, whatever the reason for the 2009 date for Daily Mail’s “update,” the Bloomberg story is current. Gear down.
GregT on Thu, 15th Jan 2015 1:49 pm
Thanks Andya,
You are correct. Somebody is playing games.
marmico on Thu, 15th Jan 2015 2:00 pm
Gear down.
The new proposed NG pipeline was moved 200 miles south to atoid the cheaters in the Ukraine. Now The EU will have to spend the money for interconnection to its pipeline grid at the Greece/Turkey border.
It doesn’t matter. Future Russian NG is going east to China. Here’s hoping that the EU doesn’t freeze or be lights out until the U.S. can rise to the occasion with liquefaction exports from the Marcellus and Utica shales.
Davy on Thu, 15th Jan 2015 2:27 pm
I don’t care about the onion of an article. The fact that it was even considered real tells you something. I was on a roll this morning and neglected to do diligence. No matter, it was an exciting thought this morning but not a happy one.
Davy on Thu, 15th Jan 2015 2:31 pm
I have no less respect for zero hedge. At least they grab multiple sources as a clearing house of alternative news.
Marm, I proudly except your nomination as board “Nutter”. I would rather be maladjusted then we’ll adjusted to a insane BAU.
bobinget on Thu, 15th Jan 2015 2:40 pm
News From Our Allies:
The Great State Of Saudi Arabia.
A Saudi Arabian blogger imprisoned for starting a liberal online forum to encourage discussion and debate in his country may not be able to withstand a second flogging this Friday, his wife says.
Raif Badawi was sentenced last May to 10 years in prison and 1,000 lashes by a Saudi court for “insulting Islam.” Last Friday he endured the first round of lashes — 50 strikes on the back of his body by a long, hard cane — in a public flogging held in the city of Jiddah. This Friday, he will reportedly be subjected to a second round of 50 lashes.
“Raif told me he is in a lot of pain after his flogging, his health is poor and I’m certain he will not be able to cope with another round of lashes,” Badawi’s wife, Ensaf Haider, told Amnesty International.
Badawi was sent to prison and assigned weekly public canings for launching the Free Saudi Liberals website. According to the Associated Press, he was also ordered to pay a fine of 1 million Saudi riyals, or about $266,000. His website has been shut down.
Badawi’s lawyer, human rights activist Waleed Abul-Khair, has reportedly also been sentenced to a lengthy jail term: 15 years imprisonment, as well as a subsequent 15-year travel ban. He was found guilty by a Saudi anti-terrorism court of “undermining the regime and officials,” ”inciting public opinion” and “insulting the judiciary,” per the AP.
According to the AP, Badawi received his first flogging in a public square outside a Jiddah mosque in front of “hundreds of spectators.”
“Raif was escorted from a bus and placed in the middle of the crowd, guarded by eight or nine officers,” a witness of the flogging told Amnesty International. “He was handcuffed and shackled but his face was not covered — everyone could see his face.”
“A security officer approached him from behind with a huge cane and started beating him,” the witness, whose name has not been released, continued. “Raif raised his head towards the sky, closing his eyes and arching his back. “He was silent, but you could tell from his face and his body that he was in real pain.”
The 50 lashes were reportedly delivered in quick succession with no break in between. According to News.com.au, Badawi will be publicly flogged in this manner every Friday for 20 weeks.
An unverified video that allegedly captured last Friday’s flogging has been uploaded onto YouTube. Badawi’s wife, who fled to Canada with their three children, told CNN that watching the video was incredibly difficult.
“It’s a scene I cannot describe, it was horrible,” she told the news outlet. “Every lash killed me.”
Human rights groups have condemned Saudi Arabia — which has a history of brutally quashing free speech — for its treatment of Badawi and have called for his immediate release.
“It is horrifying to think that such a vicious and cruel punishment should be imposed on someone who is guilty of nothing more than daring to create a public forum for discussion and peacefully exercising the right to freedom of expression,” said Philip Luther, director of Amnesty International Middle East and North Africa, per CNN.
Farhan Haq, deputy spokesman for the United Nations secretary-general, said last week that the U.N. human rights office was “deeply concerned about the flogging.”
The U.S. State Department has called for Saudi Arabia to “review Badawi’s case” and stop its “inhumane” punishment.
Badawi’s wife told Amnesty International that “international pressure” will be crucial in the fight to save her husband.
“I believe if we keep up the support it will eventually pay off. We must keep on fighting,” she told the rights group.
bobinget on Thu, 15th Jan 2015 2:56 pm
I thought we could ask the State Department to withdraw our (US) ambassador until Raif and his attorney are released, Alive.
Because we are joined at the hip to one of the world’s most repressive regimes, we share guilt.
It’s one thing to block free speech yet another to
publicly humiliate, torture, imprison, possibly murder.
It’s time we stop supporting Saudi Insanity.
At least Putin has PR skills to have reporters shot or poisoned.
Apneaman on Thu, 15th Jan 2015 3:53 pm
At least the Saudis don’t pretend they are torturing people for freedom and democracy. Strictly punishment; no bones about it. Barbarism w/o the hypocrisy. How virtuous.
Makati1 on Thu, 15th Jan 2015 8:06 pm
http://www.bloomberg.com/news/2015-01-14/russia-to-shift-ukraine-gas-transit-to-turkey-as-eu-cries-foul.html
MKohnen on Thu, 15th Jan 2015 11:13 pm
What Daily mail article is dated 2009?
I can’t find a date on the one linked in the article. The story seems to be backed by reports in Bloomberg and Business Insider, so I don’t know why some are saying this is a lie. Of course, just because Bloomberg reports it doesn’t make it true. I’m thinking everyone is quoting the Daily Mail article. In the article it states that oil has risen to $49.10. Interestingly enough, that could have been in Jan. of 2009, or now.
Dredd on Fri, 16th Jan 2015 5:03 am
Sanctions on Russia brought this on.
So, Europe can give it but it can’t take it?
Like the basketball dood said “Don’t start no shit and there won’t be no shit.”
Dredd on Fri, 16th Jan 2015 5:22 am
rockman on Wed, 14th Jan 2015 9:26 pm,
” … Rockman … doesn’t care what makes it thru to the consumers …”
Problem solved.
============================
That is the growing attitude.
But it does not solve the problem.
Nor change the very dangerous direction this compass is set to (Titanic Mistakes Using The W Compass).
The European sanctions look different now, like Apneaman on Wed, 14th Jan 2015 7:23 pm said:
“Yabut, Just yesterday the economist was telling us….
Why Europe no longer fears the Russian gasman
http://peakoil.com/publicpolicy/why-europe-no-longer-fears-the-russian-gasman“
J-Gav on Fri, 16th Jan 2015 12:03 pm
Yeah, pretty weird shit…
I checked the Mail article and it says Jan 16, 2015 up on top but there’s no dateline on the article itself – it just says “update.” And the Bloomberg article doesn’t convey the same information at all. If the Mail piece really is from 2009, I can’t remember ever seeing ZH pulling such a cheap-ass trick.
anon on Fri, 16th Jan 2015 1:09 pm
https://web.archive.org/web/20130124021910/http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html
Apneaman on Fri, 16th Jan 2015 1:10 pm
I’m not a huge ZH fan, but I think they just got sloppy on that one. The Mail are sneaky bastards. Just look up their ownership and what they stand for. They are not just the mouth piece for the elite and BAU, they are the elite. All MSM is and even publicly owned media like PBS, CBC, BBC are beholden to advertisers and political pressure. An ever growing number of “stories” are actually just ” news/press releases” from governments, think tanks and corporate hired PR firms. Ever see a video compilation with dozens of different news readers/anchors saying the exact same thing? They are reading those releases. No thinking or journalism required.
http://en.wikipedia.org/wiki/DMG_Media
J-Gav on Fri, 16th Jan 2015 1:49 pm
Apnea – Like you, I’m not a great fan of ZH (catch some of their stuff from other sites), sometimes agree, sometimes not.
But I wonder, is this really a blunder? Or was it purposely allowed to pass? Maybe positioning themselves for a “See, we told ya so,” moment which they expect to be coming soon? As regards the very real 2009 spat involving Russia, Ukraine and the EU I mean… Do we have any way of knowing?
MKohnen on Fri, 16th Jan 2015 5:32 pm
Wow, this story really got traction on the doomsday sites, but not much MSM. I still can’t really figure out if it’s just old rehash or a new story. But, even though I’m not a big fan, I don’t think ZH should be blamed for this. All the stories seem to point to the Daily Mail article. Bloomberg certainly has their own additions, though, which makes me wonder about the authenticity.
MKohnen on Fri, 16th Jan 2015 5:37 pm
Found this CNBC article about it, but from the article it sounds as if this is all just talk and opinions so far.
http://www.cnbc.com/id/102337955
Joe D on Sat, 17th Jan 2015 5:33 am
Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine
By Robert Lea – January 6th 2009, 8:16:04 am
Yep, search author and article, and sure enough.