This month, another episode of the 60 Minutes show aired on the Rossiya TV channel—and it was once again dedicated to Ukraine. This time, however, the propaganda show asked the question “Has Ukraine Frozen Over Yet?” How the show presented the issue is unsurprising. But on that note, it is worth explaining what is happening on the “gas front” between Russia and Ukraine.
How It Was
The so-called cheap Russian gas cost Ukraine too much. It was actually not always cheap in the literal meaning as well. In the period of 2009-2013, it was one of the most expensive options in Europe. Even when “blue fuel” was relatively cheap, according to experts, Russia did not subsidize Ukraine, but it was actually the other way around.
Even though about 90% of all Russia’s gas export to Europe used to pass through our country, it was Moscow that dictated its terms to Kyiv. Meanwhile, it kept portraying Ukraine as its poor relative, and one prone to scheming at that. “Ukraine simply ‘steals’ gas or constantly owes money for it,” — this is how Ukrainian political scientist Yevhen Mahda described the Russian narrative.
Yet, Russia would take everything it could reach for gas debts: the Black Sea Fleet, long-range aircraft, missiles, factories, plants and other industrial facilities. Even the miserable USD 100 discount in Kharkiv was effectively the price of Crimea because the agreements concluded there paved the way for further occupation of the peninsula.
On the grounds of this “cheap” gas, Russian politicians acted like they owned Ukraine, finding things to take over. In addition, they kept threatening they would take over Crimea, and the sentiment was expressed not only by marginal individuals, but also by quite prominent officials, such as Vladimir Zhirinovsky or now deceased former mayor of Moscow Yuri Luzhkov.
The “cheap” Russian gas has also undermined the Ukrainian economy, making it clumsy and weak. Opaque and sometimes overtly fraudulent schemes of its supply have created a large corrupt group in business and, accordingly, politics, which has eroded the country from within. The peak of this corruption and dependence was Russia’s direct interference in Ukrainian politics—an attempt to assign its protégé as the president through rigged elections.
When that attempt failed, Russia waged a real gas war, dismantled the pro-European coalition, and forced Ukraine to halt all progress. There is no need to elaborate how it ended.
Thus, the price that Ukraine paid for supposedly cheap Russian gas was dependency and humiliation, economic backwardness, and corruption. Unfortunately, the price eventually became even higher, with numerous casualties and loss of territory.
The 2005-2006 gas war finally demonstrated the fact that Moscow was using gas as a stick, a tool of political coercion, when, after the defeat of its protégé in the election, pressure began almost immediately, threatening to increase prices despite the contract. Back then, Russia sought to slander Ukraine using disinformation and fake news, portraying it as the party at fault, as it does today.
To accomplish this, it used two messages. The first one was that Ukraine was the one that offered to pay more for gas. The second one was that Ukraine somehow “lost” 7.8 billion cubic meters of Russian gas. Naftogaz Ukraine urgently debunked the first fake. However, according to Serhii Lukianchuk, the then head of the company’s press centre, the damage was done: the version about Ukraine being the one wanting to cancel the gas agreements was boosted in the media space, and the Russian side insisted on it at every point during the gas conflict.
Of course, the “missing” gas was also found, but the tarnished reputation remained, and local propagandists still used this fake to further discredit Kyiv. Some of them were more outspoken than others about the real background of these events. For example, Mikhail Leontiev, the then host of the Odnako show on Russia’s Channel One, said the following: “Ukraine can be returned to a single economic space with Russia, and most of those who live there want it. We just need to help the Slavic brothers get rid of the ‘orange plague.’ And it is very easy to get rid of it — we just need to stop funding it… A relevant joke: gas for Ukraine must cost more than for Western Europe because Ukraine gets it sooner, which means it is fresher.”
The outdated joke concealed plans to effectively transition Ukraine’s gas transit system under the control of Gazprom. It was with this in mind (and with the expectation of Yanukovych’s election as president) that a contract was signed in 2004 that provided for “cheap” gas, but in exchange, Kyiv was supposed to lose its last leverage. When Yanukovych was not elected in 2004, Russia started putting every possible pressure on Ukraine: it raised prices, blocked access to alternative gas from Turkmenistan, and tried to paint Ukraine before Western countries as an unreliable partner.
It was exactly 16 years ago, on December 27, 2005, that Andrey Illarionov, who used to be Putin’s advisor on economy, said on air of Echo of Moscow radio station that he was resigning. He explained why: “I was offered to take part in a war, not as an observer or a descriptor, but as a participant, a propagandist who explains why the decision on raising gas prices and everything that is done in our bilateral relations constitutes liberal economic policy.”
In that interview, Illarionov explained that the conflict had nothing to do with liberal economic policy (and the economy in general), calling Moscow’s actions a “transition to imperialist policies,” comparing them to Nazi Germany’s annexation of the Sudetenland before World War II.
What is happening today
Ukraine has not imported gas from Russia for more than six years. All this time, Russian propaganda time after time predicts an ice age for Ukrainians. And when Ukrainian President Volodymyr Zelenskyy called Russian gas “smelly” (which caused a flurry of hysteria in Russia), he meant precisely that this gas is densely diluted by politics. Imperial politics.
Moscow claims that it is Russia that has allegedly stopped selling gas to Ukraine due to non-compliance, and at the same time criticizes official Kyiv for not caring about “ordinary citizens” because importing gas from Russia makes more economic sense. It also portrays Ukraine’s refusal to import directly as a whim.
In reality, however, this “whim” makes so much sense that it wasn’t even Ukraine’s post-Euromaidan governments which resorted to it but… Mykola Azarov’s government. In 2012, Ukraine received about 13% of gas imports in reverse through the German company RWE. The European Union Institute for Security Studies then wrote: “The paradox of the Ukraine-RWE partnership is that the gas in question is mostly of Russian origin; by being re-routed via the EU, however, Ukraine benefits from both lower prices and greater freedom vis-à-vis Gazprom.”
Thus, this was a very obvious decision even before the armed aggression and occupation of part of the Ukrainian territories. Even for the most pro-Russian government in the history of Ukraine, while it displayed at least some common sense.
Now, strange as it may sound, Naftogaz Ukraine has become one of the defence points of our country. For example, it is actively trying to oppose the launch of the Nord Stream-2 project, which will allow Russia to supply gas to Europe bypassing Ukraine, and thus get rid of the deterrent to waging war. The head of the company Yuri Vitrenko says, “If there is no physical transit of gas through Ukraine, it increases the chances of a full-scale war between Russia and Ukraine with all the consequences.”
Although Nord Stream 2 began filling with gas in early October to begin delivery, Nord Stream 2 AG must be certified as an independent operator. Naftogaz applied to participate in the process and was admitted to it by a German regulator. Thus, Ukraine will be able to influence the launch of the Russian gas (but actually geopolitical) pipeline. Currently, Gazprom is resorting to legal tricks—it is trying to comply with European legislation only partially and still obtain permits.
Of course, the Kremlin does not like what is going on. Putin is very anxious to finally become a European “kingmaker,” as he was called by Serbian President Alexander Vucic, who recently said that without Russian gas he would have to “take the rope and hang himself.”
Unlike the Serbian leader, Ukraine was not going to hang itself, but defended its own interests in relations with Gazprom. It has already achieved a major success by getting the decision of the Stockholm Arbitration Institute, under which Gazprom paid USD 2.9 billion to Naftogaz Ukraine, as well as by signing a transit contract under which Russia must transit gas through Ukraine while using its pipelines or else pay up.
Russia is naturally not thrilled about this turn of events. Vladimir Putin has recently claimed that Ukraine’s GTS had allegedly “not been reconstructed or repaired for decades, something could burst there at any moment.”
In a recent interview to journalist Roman Tsymbaliuk, Yurii Vitrenko responded this way: “Everything will be fine, and [the Ukrainian GTS] will keep working more reliably than the Russian one, with all its regular accidents and problems.”
There is also minor mischief, such as the recent attack of Russian bots on the Facebook page of Ukrtransgaz. And before that, during 2021, the Ukrtransnafta page (Naftogaz Nafta) was blocked three times. Of course, bot attacks and Russian information provocations are part of the hybrid war that Russia continues to wage.
The topic of Ukraine’s energy independence remains important. This was reiterated by Volodymyr Zelenskyy during the press marathon “30 questions to the President of Ukraine.” In particular, he noted that “we now have the number one challenge — the issue of 2025, when the contract for gas transit expires. I believe that this will be a difficult moment, and we must quickly implement the reform of thermal modernization,” he said, emphasizing that in the next three years the amount to be engaged for this constitutes UAH 100 billion.
In turn, Naftogaz reports that it has launched new large-scale production projects with a potential of 600 billion cubic meters of gas reserves. So, we can expect that Ukraine will handle winters just fine. Russia need not worry.