FT: Ukraine gas deadlock poses latent threat to EU

While markets have been focused on the latest geopolitical flashpoint involving Russia and Ukraine – the downing of Malaysia Airlines flight MH17 – an unresolved dispute between the two countries over natural gas has continued to simmer in the background.

Gazprom, the Russian gas exporter, cut deliveries for domestic use by Ukraine in June after a bitter row over unpaid bills. Ukraine has, so far, continued to send gas to EU member states through the pipelines that cross its territory.

But analysts are concerned that could change if a deal is not reached between the two countries soon – an increasingly likely prospect as the conflict in eastern Ukraine takes new turns.

“Talks between both parties are at a stalemate even as problems over gas supplies have become more acute,” says Ilya Zaslavsky, a Russia and Eurasia fellow at Chatham House, a think-tank.
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