Russia has cut off its gas supplies to Ukraine, the country's energy minister told news wires Monday, after the two countries failed to agree on a payment scheme in late-night talks.
Although initial reports suggested that oil supplies were proceeding as normal, the Ukrainian minister told Reuters that its supplies had been halted. Earlier a source at Russia's state-backed gas giant Gazprom said that it had reduced gas supplies to Ukraine as soon as the deadline passed.
In an official statement Gazprom said it had now introduced a prepayment scheme for Ukrainian shipments, adding that it would continue to supply contracted volumes to its European consumers. It added that is had filed a lawsuit in the Stockholm Arbitration Court to try to recover $4.5 billion it says it is owed by Ukraine.
Gazprom executives are now expected to report to Russian President Vladimir Putin later on Monday, according to Russian Deputy Prime Minister Arkady Dvorkovich. Dvorkovich told CNBC Monday that he didn't expect any further sanctions to be imposed on Russia by the U.S. and Europe and said Russia was "open for investment and trade" with all its partners.
Ukraine's national oil and gas company Naftogaz responded shortly afterwards, with reports stating that it had filed its own lawsuit in Stockholm to try to recover $6 billion of what it called "overpayments" to Russia's Gazprom. It also said that it could last without Russian supplies until December.