Russia launched a gas war against Ukraine and the rest of Europe on Friday. The opening salvoes looked like Russia’s use of gas supply blackmail in the past, with “let them freeze in the dark” threats looming over Ukrainian gas consumers and westward, down-the-pipeline victims of Putin’s so-called gas weapon. But four years since the Revolution of Dignity in Ukraine and four years of fighting Russia’s invasion of Crimea and Donbas have forged Ukraine into a formidable adversary for Muscovy’s imperialist aggression. By the end of the day on March 2, Russia had backed down and failed in its blitzkrieg attack against Europe’s energy security.
On February 28, Russia suffered a major defeat in a tribunal of the Arbitration Institute of the Stockholm Chamber of Commerce. The Stockholm Arbitration Tribunal decided in favour of Ukraine’s Naftogaz and against Russia’s Gazprom in a dispute about transit of Russian gas through pipelines across Ukraine. Gazprom was ordered to pay Naftogaz $2.56 billion, and faces half a million dollars in fines for every day that it doesn’t pay the arbitration award.
Russia never abides by international agreements and is at war with Ukraine. On March 1, Ukraine’s Naftogaz detected that Russia’s Gazprom was failing to supply the contractually obligated pressure to the pipeline transiting Ukraine. Naftogaz and the Ukrainian government sprang into action. First, they called out Gazprom on its breach of contract. Then the Ukrainians took steps to maintain pressure to down-the-pipeline customers in the European Union. The Ukrainian government and Naftogaz decided that even though Russia and Gazprom was in breach of contract to supply gas to Ukraine, Ukraine was not going to be in breach of contract to supply gas to the European Union. On March 2, it was announced that all kindergartens, schools, colleges, universities in Ukraine will be closed until March 6 to prevent an energy crisis. Ukraine’s President, Petro Poroshenko, appealed publicly for all Ukrainians to turn down their thermostats and to reduce demand for natural gas.
On March 2, around noon, Gazprom declared war and announced that it would intentionally fail to meet its obligations under all its contracts with Naftogaz. It is clear that Putin thought Naftogaz would then pass on the effect this breach of contract to its down-the-pipeline customers in central and western Europe and cut their supply – rather than have Ukrainians “freeze in the dark” during a wintry cold spell that is affecting Ukraine and much of Europe besides. Instead, the Ukrainian government announced an intensification of conservation efforts and maintained pressure in the transit pipelines. Right in the afternoon, Naftogaz announced a new contract, with Poland’s PGNiG, for “reverse flow” supply of gas to Ukraine for Ukrainian domestic consumers. A bit later, Ukraine’s Ukrtransgaz warned its partners in the European Union about potential problems with gas transit because of unreliable sourcing from Russia, while reassuring them of the steps Ukraine was taking to meet its obligations for delivery of natural gas.
Having badly underestimated the resilience, business acumen, and moral integrity of the Ukrainians, by the evening on March 2 Gazprom admitted defeat in this phase of Russia’s gas war against Europe, and announced the resumption of its contracts with Ukraine’s Naftogaz.