It was 8 days ago that kraine paid a price of $268 per 1000 cubic meters of natural gas. This is a lowered rate that Russia offers exclusively to former states of the Soviet Union. Russia reneged this rate and raised it to an astounding $458.50 per 1000 cubic meters. The two sides are unable to reach a compromise and Russia has said they will not continue supplying Ukraine until they repay these inflated debts.
The Russian Government owns a 50.01% controlling stake in Gazprom, the natural gas giant Putin has used pawn to bully Ukraine and other bolshie countries. The Ukrainian Prime Minister quipped that: “This is not about gas, this a general plan for the destruction of Ukraine.” Russia and Gazprom represent a crucial supply source to Ukraine but more importantly to the European Union. 15% of EU supply is Russian Natural Gas shipped through Ukrainian Pipelines. The conflict has threatened to disrupt this crucial supply line if its not resolved in a swift and decisive manner.
This situation has developed into a convoluted mess. Religious, Ethnic and Cultural tensions have plagued the region for centuries and show no signs of ceasing. Next week, the European leaders will convene in a EU summit and will have to address the “Russian Problem”. Numerous factors are at play here that could influence their decision.
It seems that the conflict has developed into a political morass for the EU leaders. They need to punish Putin for his blatant acts of aggression without hurting their own economic interests. Unfortunately, there are numerous other elements that further complicate an already nebulous and delicate situation. Russia has been a staunch supporter of Bashar Al Assad’s regime in Syria. His Shia-Alwaite Regime is locked in a bitter conflict with ISIS, the Sunni-Extremist group profiled in our blog. Numerous pundits have hinted at the fact that the US may support Assad and the Iranian Shia government as a proxy in their fight against ISIS. This could put pressure on the EU not to punish Putin and his regime for fear of him removing support for Assad and thus enabling the ISIS.
No matter which way you look at it, the conflagration in Eastern Europe and Middle East is destabilizing the region. The World will watch closely as the EU, the United States and other global players will attempt to protect their interests and prevent the conflict from intensifying.
Tomorrow we will provide an in depth look at the ISIS advance in Iraq and what Barrack Obama can do to bring stability to the region.
