The Russian Bear?
Exports of gas from Russia fell 6% between 2006 and 2007 according to the BP statistical review of world energy. Production fell from 612.1 to 607.4 billion cubic meters (bcm) per annum and domestic consumption rose from 432.1 to 438.8 bcm per annum leading to a fall in exported gas.
* The Russian gas supply and transit system is inherited from the Soviet era when Ukraine was an integral part of that system.
* Much of Russian gas exports to Europe must transit Ukraine, placing Ukraine in a position of power and influence well beyond the courtesy of allowing pipelines to transit its territory.
* Ukraine is essentially bankrupt and unable to pay full rates for Russian gas and is thus reported to help itself to some of the in-transit gas.
* Russia has hit economic hardship with the fall in oil prices and can likely ill-afford to subsidise gas supplies to Ukraine.
* Russia and Europe are mutually dependent upon each other in the energy market and both are dependent upon Ukraine for transit of much of Russian gas exports.