Ukraine: Temporary gas shortages possible

Event

A long-running dispute between Ukraine and the Russian company Gazprom has resulted in the suspension of the gas supply from Russia into the country. Gas deliveries were expected to resume on March 1 following a court ruling but it was announced the following day that this would not take place. Gas supplies from the European market are expected to compensate for any shortages by March 6, although some shortages are possible ahead of this date.

In the meantime, the Ukrainian government has recommended that power stations switch to oil use for energy generation if possible. Furthermore, some schools have been closed and production levels have been reduced at some factories until Tuesday in an effort to conserve gas amid low temperatures.

The Russian Energy Ministry announced on Saturday that the supply of gas to Europe through Ukraine is under no immediate threat.

Context

Gas deliveries to Ukraine from Russia were expected to restart on March 1 following a court ruling in a years-long dispute between the two countries regarding the oil supply. The court ordered a USD 2.56 billion payment in Ukraine's favor due to owed compensation and transit fees. However, despite the supposed end to the gas conflict, Gazprom refused to resume shipments. This case has been seen as a proxy for the larger conflict between Russia and Ukraine.

Advice

Individuals in Ukraine are advised to keep abreast of the situation and conserve gas if possible in the short-term.