MOSCOW — Russian Prime Minister Vladimir Putin struck a deal early today with the European Union on supervising the flow of natural gas through Ukraine, paving the way to restart shipments to fuel-starved European customers.
The price dispute that first drove Russia to cut off gas to Ukraine on New Year's Day had yet to be resolved, and there was no word on how soon gas deliveries to Europe would start up again. There was no immediate response from Ukraine.
Still, European officials said they expected Russia to resume gas deliveries. The agreement calls for monitors to ensure that Ukraine doesn't siphon fuel en route from Russia to the EU.
Fuel shortages worsened in the last two days, after Gazprom, the Russian gas monopoly, stopped pumping gas through pipelines that cross Ukraine. In Eastern Europe, schools and factories were forced to shut down, and in some regions shivering families scrounged for wood and coal to heat their homes.
Analysts say Russia is under pressure to resolve a stalemate that has badly tarnished its reputation in the West. Though both Ukraine and Russia are losing cash and taking harsh criticism from angry European leaders, Russia, where the economy depends heavily on supplying about a quarter of Europe's gas, stands to lose the most, observers say.
Russia said deliveries had to be halted because Ukraine was stealing European-bound fuel and blocking pipelines; Ukraine denies the accusations. Experts say it's impossible to know which country is telling the truth.
"There's been a lot of damage done to Russian credibility as a gas supplier, whether deserved or not," said Jonathan Stern, director of gas research at the Oxford Institute for Energy Supplies. But, he added, "even people like me, who've been following this minute by minute, don't know who to believe."
Still, he said, Russia comes in for criticism because Gazprom resorted to a shutdown instead of allowing gas delivery while negotiations continued.
"You don't stop the gas just because you don't agree about a price," Stern said.
Russia is certain to face lawsuits from Europe for failing to fulfill contractual obligations to its customers. Ukraine will also be dragged into litigation -- Moscow has already filed a lawsuit in arbitration court over accusations of siphoning gas. Both countries' reputations as fuel providers are suffering.
