Russia announced it might stop transit of natural gas through Ukraine on January 1. If that happens, Europe will face another gas crisis, and most European leaders will hold Moscow responsible.
Kiev and Moscow have been negotiating transit shipments of Russian natural gas via Ukraine, as well as direct gas supplies to this country, but so far the two sides have failed to reach an agreement. Reportedly, Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelensky could possibly meet in Paris on December 9 to discuss not only the Donbass conflict but the gas issue as well.
Presently, Ukraine is not buying gas directly from Russia, but it is importing Russian natural gas from Slovakia. Kiev is interested in a long-term contract with Russian energy giant Gazprom, as it looks to renew gas supplies from Russia. Moscow, on the other hand, offers a short-term deal, as it hopes to finish the Nord Stream 2 and TurkStream pipelines that should bypass Ukraine. However, it remains to be seen if the Nord Stream 2 will be fully built, or if the US will pressure European countries to sabotage the project at the very last moment. Some analysts believe that this pipeline, even after fully completed, will not have capacity to replace Ukraine as a transit country. The TurkStream on the other hand will be completed soon, but only the pipeline that connects Russia and Turkey. It is still not clear what will be the final route, and how Russian gas will get to Europe via Turkey.
If the Kremlin decides to stop gas transit through Ukraine, which is not very likely, it will shoot itself in the foot. Both the United States and the European Union will blame Russia for gas shortages in Europe, and will describe Gazprom as an unreliable partner. Recently several European countries, according to reports, froze Gazprom assets after the company lost a legal battle against Ukrainian Naftogaz. The Kremlin will now likely have to make some compromises with Ukraine and the EU. Since the status of the Donbass will be on the table in Paris, it would not be improbable for Moscow to make certain concessions regarding this territory in order to get better gas arrangements with Ukraine.
Russian authorities have recently returned three Ukrainian military ships from their Crimean port to Kiev. The navy vessels were seized during a clash in the Kerch Strait last year. Such a unilateral move could be interpreted as Moscow’s attempt to “normalize relations” with Ukraine ahead of the Normandy talks in Paris. However, since Ukraine still holds a Russian tanker it seized in July of this year, the release of three Ukrainian navy vessels can also be interpreted as a sign of Russian weakness. In addition, any concessions over the Donbass might help Gazprom, but will have negative consequences for Russia. As soon as the Donbass issue is resolved, Ukraine, backed by the West, will undoubtedly put the Crimea dispute on the table.
Some analysts speculate the Kremlin might eventually exchange the Donbass not just for gas transit, but also for a de facto recognition of Crimea as an integral part of the Russian Federation. Reportedly, Apple has recently complied with Russian demands to show the Crimean peninsula as part of Russian territory on its apps when viewed from Russia. However, the apps do not show it as part of any country when viewed elsewhere.
Even if the Kremlin eventually returns the Donbass to Ukraine, there is no guarantee that Kiev and its Western sponsors will turn the blind eye to the status of Crimea. They might temporarily accept the fact that the Peninsula is presently under Russian control, but in the long term they will keep pressuring Russia to return the territory to Ukraine.
In the meantime, Moscow will keep treating Ukraine merely as a transit country for Russian natural gas. Ever since the start of the Donbass conflict in 2014, the Russian leadership’s priority has been gas supplies and energy policy rather than keeping Ukraine in its sphere of orbit. If forced to choose between the Donbass and flawless gas transit to Europe, the Kremlin would rather pick gas. The problem for Moscow however, is the fact that the Donbass is an energy-rich region, and Russia through the self-proclaimed Donetsk People’s Republic and Lugansk People’s Republic de facto controls all the coal production from the Donbass. If it gives up the self-proclaimed republics, it will lose not only a method of pressure on Kiev, but also significant natural resources.
It is likely that Putin and Zelensky during their Normandy talks will pay more attention to the gas dispute than to the Donbass conflict. They might even find a solution for gas transit, but it is highly uncertain if there will be significant progress in resolving the status of the Donbass.
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