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Divide and Conquer
Hungary Cuts Off Gas to Ukraine

When Gazprom cut off gas supplies to Ukraine this summer over unpaid bills and a pricing dispute, it put Kiev on notice. Demand for natural gas ebbs in warm months, so Ukraine was not immediately pressed by the gas shortfall. But with winter approaching and the dispute with Moscow still unresolved, Kiev has scrambled to fill all its reserve capacity by buying Russian gas through European intermediaries.

Countries like Poland, Slovakia, and Hungary initially all reversed flows of Gazprom gas back into Ukraine in order to meet the demand. In a clear shot across the bow, Gazprom appeared to briefly tighten gas supplies to Poland earlier this month. Gazprom denied it had actually done so, and Poland held its ground by continuing to resell the gas to Ukraine.

But European solidarity has been broken.  The FT reports that Hungary is ceasing supplies to Ukraine just days after Gazprom CEO Alexei Miller met with Hungarian Prime Minister Viktor Orban in Budapest:

Naftogaz, the Ukrainian distributor, said Hungary had stopped transporting gas at 19.00 Ukrainian time on Thursday, notifying Kiev that it was halting supply “for technical reasons” until further notice. It came after Alexei Miller, Gazprom chief executive, on Monday met Hungary’s premier Viktor Orbán, Naftogaz said.

At the same time, Orban was boasting of increased supplies of Russian gas headed his country’s way, as Reuters reports:

[Orban] told public radio that he had held talks with Gazprom CEO Alexei Miller and the company had agreed to ship increased volumes of gas to boost levels at Hungary’s storage facilities in the coming weeks.

Orban’s calculus includes both geostrategic positioning and a healthy dose of self-preservation. His recent pronouncements distancing himself from the West writ large have a receptive audience at home, and a high-profile move like this to side with Russia against Europe will no doubt play well with that same cohort.

But the move is also motivated by fears that, once temperatures drop and demand for natural gas rises, Ukraine will begin siphoning off gas from pipelines that cross its territory, bound for other European countries like Hungary. Indeed, that’s exactly what happened in the past when Russia tightened its energy thumbscrews on Ukraine.

The clear winner here, of course, is Moscow. “Divide and conquer” is an ancient and effective tactic, and Putin, through Gazprom, is using it to great effect here.

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