Should Europe worry about Russia's 'gas war' with Ukraine?

Russian gas pipe in Ukraine Credit: AP Photo/File

European Union leaders are concerned about the risk of gas shortages in Ukraine after Russia announced today it would raise the prices in light of the crisis in Crimea.

What impact would this have on the UK and Europe?

What happened?

Russia's top gas producer Gazprom said it would raise gas prices for Ukraine from April.

This comes after Ukraine said its fragile economy is currently not able to pay off its debts to Russia, which now amount to $2 billion (£1.2 billion).

Why is Russia doing this?

Russia's president Vladimir Putin insisted the price hike is not politically motivated. But gas exports have always played important part in Russia's geopolitical strategy.

Lower gas prices were part of a financial aid agreement that Moscow offered to ousted president Viktor Yanukovich in order to prevent Kiev from signing a trade deal with the EU.

With Yanukovich gone, the deal is now off and Ukraine faces higher prices.

Read: Ukraine's gas debt to total $2 billion

Didn't something like this happen before?

Yes. Russia threatened to cut off Ukraine's gas supply several times in the past decade. In 2009, Gazprom turned the taps off for two weeks.

This had serious consequences for Europe. Several Eastern European countries experienced energy shortages during the winter and prices of energy went up.

Will my gas bills increase?

Not as an immediate result of this crisis - the UK is not dependent on Russia's gas.

Moreover, current energy stocks are high. Because of this year's mild winter, gas consumption is the lowest since 2001 - meaning that there is plenty in reserve should supplies run short.

Read: White House pledges 'sufficient funding' to Ukraine

What about other European countries?

Russia is the EU's biggest gas supplier, providing around a quarter of its demand. A third of that is transported through Ukraine.

EU energy ministers said there is no immediate threat to energy supplies in Europe, as stocks are high and the heating season is almost over.

Why doesn't the EU buy its gas elsewhere?

Following previous gas supply crises, the EU has increased requirements for member states to hold storage.

It has also improved infrastructure and sought to diversify supply - one possibility it is looking at is importing gas from North America.

Read: Russian and Ukrainian ministers 'begin talks'