Case Study Disruption of Energy Supplies Russia

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  • Case Study: Disruption of Energy Supplies: Russia
    • Background
      • Tensions between Russia and Ukraine have been high since 2004 when pro-Western forces won control of the government over Viktor Yanukovych
      • Russia also opposes Ukraine's desire to join the North Atlantic Treaty Organization and the EU
      • The EU gets a quartet of its gas supplies from Russia - 80% of which passes through Ukraine
    • What sparked the Crisis
      • Ukraine and Russia have faced negotiations over the renewal of gas supply contracts every year, by midnight 31 December'08 they have failed to agree on the price Kiev should pay in 09
      • This has happened 3 times before, but supplies completely stopped on Jan 7 when Russia accused Ukraine of siphoning off gas meant for European customers
      • The EU called the supply cut 'completely unacceptable', demanded immediate restoration and entered into shuttle diplomacy between Kiev and Moscow
      • Deal reached on Jan '12 whereby EU and Russian observers would monitor supplies across Ukraine, collapsed within hours
      • The two countries also failed to agree on a price Russia would pay Ukraine for gas transit to Europe
    • Impacts
      • Some, like Bulgaria, Serbia and Bosnia, are almost completely dependent on supplies via Ukraine and so were left with major shortages, during a very cold spell in Europe
      • In the meantime European countries had to shut down industrial plants and domestic heating systems, find alternative sources of gas.
      • Schools were shut and people had to revert to using log fires to heat their homes

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