Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Netflix - FAANG a Buy, Sell or Hold?, CME Black Swans Chasing Value in Biotech Stocks - 5th Aug 21
We Will See SPX 4600 In 2021 - 5th Aug 21
Revisiting The Excess Phase Stock Market Peak Pattern - 5th Aug 21
Dramatic Divergence between US and European Stock Markets - 5th Aug 21
Budgie Clipped Wings, How Long Before Flight Feathers Grow Back After Clipping, 4 Week Update - 5th Aug 21
Lisa Su's AMD Stock Price Rockets to the Moon! $200 Target, How to Buy for Under $78 - 4th Aug 21
Gold Jumps for Joy Only to Hit the Ceiling… Hard - 4th Aug 21
Is Wise Really The King of Online Money Transfer Services? - 4th Aug 21
Tips for Investing Your Money in Stocks - The Ultimate Guide - 4th Aug 21
Gold is the Key to Financial Wisdom - 4th Aug 21
How to Trade Binance Vanilla Options for the First Time on Bitcoin Crypto's - 2nd Aug 21
From vaccine inequality to economic apartheid - 2nd Aug 21
Stock Market Intermediate Top Reached - 2nd Aug 21
Gold at a Crossroads of Hawkish Fed and High Inflation - 2nd Aug 21
Bitcoin, Crypto Market Black Swans from Google to Obsolescence - 1st Aug 21
Gold Stocks Autumn Rally - 1st Aug 21
Earn Upto 6% Interest Rate on USD Cash Deposits with Binance Crypto Exchange USDC amd BUSD - 1st Aug 21
Vuze XR VR 3D Camera Takes Near 2 Minutes to Turn On, Buggy Firmware - 1st Aug 21
Sun EXPLODES! Goes SuperNova! Will Any planets Survive? Jupiter? Pluto? - 1st Aug 21
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Another Natural Gas War Between Russia and E.U. In 2010

Politics / Natural Gas Dec 23, 2009 - 12:53 PM GMT

By: Pravda


Best Financial Markets Analysis ArticleRussia and the European Union signed a memorandum on the mechanism of early warning in the energy sphere. The document was signed by Russian Minister of Energy Sergei Shmatko and European Energy Commissioner Andris Piebalgs. This is the way for the EU and Russia to prepare for possible winter issues with the transit of gas through Ukraine. The document is expected to be discussed by the heads of the two parties at the RF-EU Summit to be held in Stockholm on November 18.

“The mechanism of early warning is to ensure stable and continuous deliveries of energy carriers, as well as the prevention and overcoming of emergency situations in the energy sphere with minimal consequences,” says the report.

According to Piebalgs, “the new document describes the working process of the warning system, as well as the procedure of the joint work of experts in case of an emergency or conflict situation.” The document, he continued, includes measures to be taken by the parties for preventing conflicts, and in the situation, when a conflict emerges. The mechanism will work not only in gas transportation, but also in the sphere of oil deliveries and the transmission of electricity, ITAR-TASS reports.

In the beginning of 2009, Gazprom suspended gas supply to Ukraine. According to the Russian company, transit fuel for European consumers was supplied to the Ukraine’s Gas Transmission Network but was not delivered to the consumers. This caused the holding to suspend the transit of gas through Ukraine.

The transit resumed after contracts were signed between Gazprom and Ukraine’s Naftogaz. However, a number of European countries experienced lack of fuel, which resulted in suspension of work of some factories and municipal establishments.

This year, the Russian party mentioned possible issues with payments for the gas supplied to Ukraine. In November, the Ukrainian party acknowledged the issues, but fulfilled its obligations within the set time frame.

Meanwhile, financial and economic state of affairs in Ukraine is threatening. Fitch Ratings downgraded Ukraine's sovereign rating to B-minus from B along with the ratings of cities and banks of the country, and the rating outlook is negative.

In September, Ukraine’s Naftogaz defaulted on the Eurobond. Later, the main Ukrainian railroad carrier Ukrzaliznytsya experienced a technical default on its syndicated loan of $550 billion. While Naftogaz’s debt was restructured at a raised interest rate, the government was not able to help the Ukrainian railroads.

Ukraine’s state debt is rapidly growing. According to Yushchenko’s front office, the state debt has increased 2.6 times since last year, and as of July 31, 2009 was evaluated at $23 billion. The sum of the sovereign debt increased four-fold, to $9.9 billion. Naftogaz’s budget deficit is over $4 billion.

Loans for $16.5 billion received from the International Monetary Fund are spent on covering the budget deficit, and likely, payments for the Russian gas. However, the Ukrainian party is not in a hurry to fulfill its obligations to the Fund, including those in the area of increasing consumers’ prices for gas. Besides, the country uses domestic loans. There is information that the government is set on unsecured emission of the local currency, which may cause hyper inflation in the near future.

Experts believe that the new decree issued by the National Bank of Ukraine on changes to the organization and implementation of the currency exchange procedures on Ukrainian territory indicates that this is a possibility. According to this document, the banks are not allowed to change the exchange rate during the day, and physical persons are not allowed to buy foreign currency worth over 80 thousand grivnas. A passport is required when purchasing foreign currency worth over 15 thousand grivnas.

It is unknown how Ukraine is going to pay for its November gas. Meanwhile, Ukrainian media wrote about Moscow and Kiev exchanging drafts of new contracts for gas supply. The Ukrainian party is interested in mitigating the current terms and raising transit fees.

A Ukrainian media source released a document that is allegedly a copy of a Moscow contract draft. The draft contains the following phrase: “The Ukrainian party guarantees the immunity of the property of the Russian party and its economic entities, natural gas and the Gas Transmission Network that belong to Russia and are located on Ukrainian territory.”

According to the same source who could not yet be verified, possible arguments between the parties would be considered by the Moscow Arbitration Court.

Ukraine ’s issues are obvious to Europeans as well, hence the memorandum. Some sources suggest that a new gas crisis may change the status of the Ukrainian gas transportation system.

Anastasia Romasheva

Read the original in Russian

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in