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January 2006: Russia Shuts Off Gas. A pricing and transit dispute between the Yushchenko government and Russia’s state-owned Gazprom results in a gas cutoff, lasting a couple of days and quickly causing supply drops in European countries that import Russian gas via Ukraine. The dispute underscores the energy interdependence between Russia and Ukraine, with 80 percent of Russia’s gas exports to Europe passing through the country. At the same time, Ukraine relies on Russia for much of its own natural gas supply, for which it has historically paid below-market rates. The shutdown occurs amid an economic slowdown that begins to dent Yushchenko’s popularity.
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