In an obvious move to pressure Ukraine, Gazprom Raises Gas Export Price.

Russia’s natural-gas export monopoly raised prices for Ukraine 44 percent after a discount deal expired, heaping financial pressure on the government in Kiev as it negotiates international bailouts.

OAO Gazprom (GAZP) said Ukraine is losing its right to pay less because it has piled up a debt of more than $1.7 billion since 2013. Ousted President Viktor Yanukovych won a lower price at the end of last year as he grappled with protests after ditching an association agreement with the European Union, on top of a previous discount in April 2010. That may also be overturned, according to Russia’s government.

The move raises the prospect that state-run Gazprom may threaten to halt sales to Ukraine, which relies on Russia for about half its gas.

Ukraine has a “very low” 7.2 billion cubic meters of gas in underground storage, Andriy Kobolyev, chief executive officer of state-owned NAK Naftogaz Ukrainy, told reporters in Kiev today. Naftogaz has asked regional governors to limit utilities’ gas consumption this month, he said.

Notice how talk of sanctions is winding down. They didn’t work and won’t work. Russia has the upper hand.

Mike “Mish” Shedlock