Shares of Russia’s gas giant Gazprom fell on Monday as the long running dispute between Ukraine and Russia over gas prices appeared to ratchet up again. <br /><br />Sources at Gazprom have told Reuters that as of Friday Ukraine halted Russian gas imports.<br /><br />They also said that the flow of gas to Europe via Ukraine is so far unaffected.<br /><br />The reports raised concerns of a new “gas war” breaking out between Moscow and Kiev.<br /><br />Ukraine has repeatedly complained it is being overcharged and has also said that it does have enough gas in storage to heat the country through the winter. <br /><br />This all comes just weeks before the former Soviet republic of Ukraine is due to sign an association and free-trade agreement with the European Union – a move that has angered the Russian leadership.<br /><br />Russia supplies around a quarter of Europe’s gas needs with about half of that transiting through Ukraine. <br /><br />Countries in central and southeastern Europe, including Italy, get virtually all of their Russian gas supplies via Ukraine. <br /><br />Any prolonged shutdown of deliveries could hit hard as it did during a gas war in 2009 which left many homes and businesses without heat during freezing winter temperatures.<br /><br />Buffer state<br /><br />Ukraine has for years been a politically troubled buffer state between Russia and the European Union, and has used its status as a gas transit corridor to play Moscow off against Brussels.<br /><br />Now, as Russia builds alternative export routes, Ukrainian President Viktor Yanukovich is seeking a rapprochement with the West even as it struggles to pay its import bill and its public finances become increasingly precarious.<br /><br />The supply worry comes at a vulnerable moment for Europe, whose second-biggest gas supplier Norway faces production constraints due to refurbishment works on ageing fields this winter.<br /><br />We learned on Monday that Russian President Vladimir Putin and his Ukrainian counterpart Viktor Yanukovich had met in Moscow during the weekend.<br /><br />Kremlin spokesman Dmitry Peskov told reporters: “They held talks, comprehensively discussed trade and economic relations of Ukraine and Russia.”<br /><br />It was not disclosed if the gas situation was discussed.
