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Russia sharply cut gas flows to Europe via Ukraine today in a dramatic worsening of a pricing dispute with Kiev that threatened to disrupt supplies as far west as Italy and Germany.
Russian export monopoly Gazprom said it supplied some 65 million cubic metres (mcm) to Europe on Tuesday through ex-Soviet neighbour Ukraine, a fall of 78 per cent it had been shipping since the dispute erupted on January 1st.
The European Union, dependent on Russia for a quarter of its gas, urged Moscow and Kiev to find a solution this week and German Economy Minister Michael Glos said it was very important the two sides began negotiations.
The head of Ukraine's state energy firm said he would fly to Moscow on Thursday. Gazprom said it was ready to talk any time but did not expect Ukraine to return to the talks table for now.
The escalation in the price dispute and severe cold weather on Tuesday drove the British gas market, Europe's biggest and most liquid gas market, to its highest level since October.
GDF Suez said Russian gas supplies to France had plunged 70 percent, though the euro zone's second biggest economy is less vulnerable than Germany and Italy as 80 percent of its electricity is produced by nuclear energy.
Hungary, Bulgaria, Turkey, Macedonia, Greece and Croatia said Russian gas flows via Ukraine had halted, creating what Bulgaria called a "crisis situation" in the middle of winter.
Austria and Romania said deliveries were down 90 per cent and 75 percent respectively, and German energy firms warned there could be gas shortages in Europe's biggest economy if the dispute dragged on and sub-zero temperatures persisted.
