Russia cut the flow of natural gas to Ukraine today as talks over pricing and transit terms unraveled into a bald political conflict that carried consequences for Ukraine's recovering economy and possibly gas supplies to Western Europe.
Effects were starting to be felt in Europe tonight. The Hungarian natural gas wholesaler MOL said that deliveries from the affected pipeline were down more than 25 percent, according to Reuters. The news agency added that in Poland, supplies dwindled 14 percent.
Polish officials said reserves were adequate for now, and the Hungarian company asked big gas consumers to switch to oil where possible.
The dispute comes a year after the Orange Revolution brought a pro-Western government to power in Ukraine, and ends a decade of post-Soviet subsidies in the form of cheap energy that allowed Moscow to retain some influence over the former Soviet republics.
At the heart of the conflict is a jump in Moscow's utility bill for Ukraine: Russia is now asking for $220 to $230 per 1,000 cubic meters of natural gas, up from $50 now. Ukraine's economy has depended on buying cheap energy from Russia.
Apparently, an 11th-hour attempt to head off the shutdown failed.
Ukraine's natural gas distributing company, Naftogaz, said today that it had faxed a draft contract to Russia shortly after 11 p.m. Saturday agreeing to terms laid out earlier that evening by President Vladimir V. Putin of Russia, according to Russian news reports.
Mr. Putin had suggested a three-month grace period if Ukraine would agree to pay the higher prices thereafter. However, Gazprom, the Russian energy giant, said today that the fax had fallen short of demands.
Around 10 this morning, Gazprom began cutting the pressure on pipelines at the border with Ukraine; the effect on the Ukrainian web of gas pipelines was felt later in the day.
"The formula is simple," Gazprom's chief spokesman, Sergei V. Kupriyanov, said. "We supply Europe minus Ukraine."
The reduced pressure will not immediately lead to gas shortages in Ukraine or countries that receive gas exported from Russia through Ukraine, both Gazprom and independent experts say. Countries along the pipeline, including Ukraine, maintain reserves.
Still, choking the westbound pipes marks a dramatic gamble by Russia, one likely to send political and economic ripples westward in the months ahead.
Russia is positioning itself to become an energy-supplying nation capable of easing dependency on Middle Eastern oil in Western Europe and even in the United States.
On the same day it throttled back its gas to Ukraine, Russia assumed the chairmanship of the G-8, the club for the world's large developed economies, promising to push the theme of "energy security."
Mr. Putin has boldly promised not only a secure supply of fuel when he has made trips to Germany, Turkey and Japan last fall, but has also presented Russia as a potentially much larger energy exporting nation in the years ahead.
He pushed Germany to endorse a multibillion underwater gas pipeline in the Baltic Sea. Gazprom is hoping to extend the pipe to Denmark, Belgium and the United Kingdom. Gazprom is also in talks with a short list of five major energy companies to develop a massive gas field in the Barrents Sea, far above the Arctic Circle, hoping to ship significant quantities of liquefied natural gas directly to the world's largest energy consumer, the United States.
Amid the ambitious plans, Mr. Putin has said Russia's foreign policy will hinge on energy exports.
And Gazprom, 51 percent owned by the state, is the largest policy instrument -- though the company sometimes insists it operates only on business principles. Gazprom provides about 25 percent of Western Europe's natural gas.
Today's midwinter cut in gas supplies to Ukraine came as an unsettling reminder that promises of energy exports are not Russia's only method of using oil and gas to further its foreign policy goals -- it can also turn off the valve of energy exports.
The sudden loss of fuel, if it persists, could shake Ukraine's economy the way the 1973 oil embargo helped plunge the United States into recession. Ukrainian officials said Ukraine's economy could turn from modest growth now to a contraction of between 4 and 5 percent in 2006.