Russia cuts off all gas supplies to Ukraine

Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations, Ukrainian Energy Minister Yuri Prodan said.

“Gas supplies to Ukraine have been reduced to zero,” he said.

Russia’s state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies, after Kiev failed to settle its huge debt.

Gazprom had sought from Kiev $1.95 billion – out of $4.5 billion it says it is owed – by 06:00 GMT.

The Russian firm said it would continue to supply gas to Europe.

Russia-Ukraine ties remain tense since Moscow annexed Crimea in February.

Kiev says Moscow backs separatists in the east of the country. Russia denies the charge.

“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies,” Gazprom said in a statement on Monday morning.

“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”

Moments later, both Gazprom and Ukraine’s state-owned Naftogaz company filed lawsuits against each other in the Stockholm arbitration institute.

Gazprom said it wanted to recover $4.5 billion from Naftogaz, which is dealing with gas supplies to Ukraine. Meanwhile, Naftogaz said it was seeking to recover $6 billion in “overpayment” for gas since 2010.

Russian PM Dmitry Medvedev said Ukraine’s position on the issue “smacks of blackmail”.

The latest moves follow crisis talks between Ukraine, Russia and the EU on the issue.

“We reached no agreement. The chances that we meet again are slim,” Gazprom spokesman Sergei Kuprianov said after the latest round of the talks ended in Kiev over the weekend.