President Medvedev made clear that Russia would impose its will on the gas front by cutting supplies to Europe in order to force the Ukraine to pay market prices for the gas from his nation. He told Ukrainian leader Yushchenko that he was prepared to negotiate at any time, but insisted, “the price for the gas needs to be the market rate corresponding to the European price levels.” Russia cut off gas supplies to the Ukraine and several nations in order to compel compliance with their demands. Russia is facing an economic crisis since the price of oil and gas has plunged which results in a loss of billions for the Russian government.
The current oil crisis is impacting those nations who were making billions out of the ever increasing price of gas and oil. The Russian nightmare is a shift in Europe from reliance on gas to alternative forms of energy. Putin operates on the assumption that gas and oil will remain dominant into the future, but there is always the possibility that nations of the world will shift and move away from traditional sources of energy. What then, Mr. Putin?