Russian energy company Gazprom cut off natural gas supplies to Ukraine on June 16 following weeks of EU-arbitrated negotiations between Russia and Ukraine. Five days earlier, Russian Energy Minister Alexander Novak threatened that Moscow would do so if Kiev did not make a $1.95 billion payment on its natural gas debt by June 16. The Russian cutoff is a direct response to Ukraine's refusal to pay that amount. It is also part of Russia's negotiating tactics over the future of Ukraine's energy supplies. Notably, Gazprom has cut off only as much natural gas as Ukraine consumes; what it supplies to Europe will continue to flow through Ukraine unabated, at least for now. Even if Russia were to cut off supplies to Europe, there would be little impact in the short term. The German government has said that Germany has enough reserves and natural gas supplies to temporarily meet its demand. Storage volumes remain high across the continent, and the approaching summer means that countries in Central and Eastern Europe will require less natural gas in the coming months, giving European and Ukrainian leadership time to negotiate with Russia before winter. Although it is possible that Russia will impede and delay compromise for the next several months — a tactic that would force Ukraine to accept the higher price Gazprom demands — this cutoff is more likely a short-term bargaining ploy to enhance Russia's negotiating position.
