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Gas cut in Ukraine goes mostly unnoticed

GazpromGas supply talks between Russia and Ukraine failed after they were unable to agreed on a price at the end of their contract leading to a little known about supply cut in the latter.

Ukraine failed to make an advance payment for July deliveries, and Gazprom “won’t deliver gas to Ukraine at any price without prepayment.”

The issue it seems was not the pricing as one may have thought, but a take-or-pay clause that required Ukraine to buy a certain amount of gas regardless of its needs.

Surprising that the UK weren’t panicking at this news but the markets showed little sign of concern as the impact on gas prices were minimal as a result.

Where supply disruptions between Russia and Ukraine have in the past had a knock-on effect to the UK, mild temperatures and ample supply have clearly given the UK peace of mind.

A press release from the Ukraine promised that:

“Gas deliveries through Ukraine to all European and Turkish clients of the Russian company Gazprom will continue in full volume and in line with all previously signed agreements, while only deliveries to Ukraine will be suspended.”

A sigh of relief for the UK then and it seems the Ukraine are coping, relying on natural gas supplies from Poland, Hungary and Slovakia.

Lets see how long it lasts, as we’re sure there’ll be a ceasefire once the colder weather starts to creep in. Don’t forget Ukraine, winter is coming.