In the New Year’s spirit, I’m going to stick my neck out and predict that the current annual Russo-Ukrainian gas dispute will be resolved by the weekend.
Why? Because there’s nowhere else for either side to go. They’ve both pushed all of their bargaining chips into the middle of the table.
Depending on which way you look at this crisis, and who you believe, one of two things has happened in recent days. Either:
- Russia cut off the gas to Ukraine, Ukraine retaliated by taking some of the gas intended for customers in Western Europe, and Russia re-retaliated by shutting off the gas supply to Europe.
- Russia cut off the gas to Ukraine, then accused Ukraine of stealing gas intended for Europe to give it an excuse to cut off the gas supply to Europe.
Either way, the gas supply from Russia to Europe via Ukraine has been shut off. There’s nowhere else for either side to go in this dispute. There are no more gas supplies to cut, and no other sanctions either can apply will do the other side anywhere near as much damage as has already been done.
The heads of both the Ukrainian and Russian gas companies are in Moscow today, and they’ll both be meeting with grumpy EU officials. With nowhere else to go, expect a deal to be done within days, and for all three parties to go home claiming a modest ‘victory’.
PS – for a fascinating primer on the historical background to the Russia-Ukraine gas dispute, check out Jerome Guillet’s post in the European Tribune.