Economic crises sharpen Russia-Ukraine gas row

KIEV/MOSCOW (Reuters) – The deepening economic crises that have gripped both Russia and Ukraine may make it harder to find a resolution to the row over cut-off gas supplies, analysts said on Friday.

Russian state-controlled gas behemoth, Gazprom (GAZP.MM), halted supplies to Ukraine on New Year’s Day at 2 a.m. EST, provoking memories of a similar cut-off three years ago that briefly reduced gas supplies to some European Union customers.

There is little room for maneuver.

“The very severe financial stringency for both sides, but especially for Ukraine, will make this negotiation even more protracted than in previous gas crises,” said Christopher Granville, managing director of Trusted Sources, an emerging markets research company in London.

“It will take longer to reach a deal this time,” he said.

Reuters