Monday, January 02, 2006

Putin lack of patience, tact and smarts trips him up.

Russia: This was certainly a bone-headed move on Russia's part because it just gave ammo to its critics, let Europe realize this could be a real problem in the future and lets Ukraine off the hook for now with paying way below market prices.

MOSCOW - Russia was restoring full gas deliveries to European states on Tuesday, effectively easing a blockade on Ukraine, but the Kremlin's row with its ex-Soviet neighbor that had triggered the sanction was still bubbling. Russia accused Kiev of illegally tapping off gas from the pipeline crossing its territory to Europe after the Russian gas monopoly Gazprom cut its feed for Ukraine on Sunday. States from Serbia to Germany complained of supply cuts and Washington warned Moscow against using energy as a political tool. In agreeing on Monday to restore pumping close to normal levels, Moscow bowed to Western pressure and acknowledged, albeit reluctantly and with some frustration, that it could not fully control and channel gas supplies crossing Ukraine. "With the aim of preventing a possible energy crisis, caused by Ukraine illegally taking gas, Gazprom has taken the decision to deliver additional gas into the gas transport system of Ukraine," the company said in a statement. "We stress that the additional delivery of gas is not designed for Ukrainian consumers but is meant for transit through the territory of Ukraine for delivery to consumers outside the borders of Ukraine."
Russia harms its image coming into heading the G8 and potentially disrupts the energy market as well trying to strong-arm Ukraine. Ukraine even acknowledge they have to pay market prices, but got a good angle to say Russia wants to undermine the new government who is seeking more western ties. Russia could have come out of this smelling like a rose if it played itself as a under-siege supplier by a customer who is trying to take advantage of them. They could have even pulled off cutting off supplies if it wasn't for the fact their other customers are on the same line who are also harmed by the shut down. Just an amateurish operation by a country that should know better.

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