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A look at what Russia and Ukraine want in their dispute over gas and what's at stake

  • Ukraine Russia Gas-1.jpg

    FILE - In this Wednesday May 21, 2014 file photo, gas pipeline station workers walk past the gas pressure engines in Zakarpattia region, Western Ukraine, 15 kms on border with Slovakia in Uzhgorod, Ukraine. Russia on Monday, June 16, 2014, cut gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills amid continued fighting in eastern Ukraine. The decision does not immediately affect the gas flow to Europe, but could disrupt the long-term energy supply to the region if the issue is not resolved, analysts said. (AP Photo/Sergei Chuzavkov, file) (The Associated Press)

  • Ukraine Russia Gas-2.jpg

    FILE - This Wednesday May 21, 2014 file photo shows a gas pressure gauge in Bil 'che-Volicko-Ugerske underground gas storage facilities in Strij, outside Lviv, Ukraine. Russia on Monday, June 16, 2014, cut gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills amid continued fighting in eastern Ukraine. The decision does not immediately affect the gas flow to Europe, but could disrupt the long-term energy supply to the region if the issue is not resolved, analysts said. (AP Photo/Sergei Chuzavkov, file) (The Associated Press)

  • Russia Putin-3.jpg

    Russian President Vladimir Putin listens during a meeting at Novo-Ogaryovo residence outside Moscow, Russia, Monday, June 16, 2014. Russia on Monday cut gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills amid continued fighting in eastern Ukraine. The decision does not immediately affect the gas flow to Europe, but could disrupt the long-term energy supply to the region if the issue is not resolved, analysts said. (AP Photo/RIA Novosti, Alexei Druzhinin, Presidential Press Service) (The Associated Press)

  • Russia Ukraine Gas-4.jpg

    Russian state-run natural giant Gazprom CEO Alexei Miller attends a news conference in Moscow, Russia, Monday, June 16, 2014. Russia on Monday said it would cut off gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills. (AP Photo/Pavel Golovkin) (The Associated Press)

  • Russia Ukraine Gas-5.jpg

    The headquarters of Russia's state-run natural gas giant Gazprom in Moscow, Russia, Monday, June 16, 2014. Russia said on Monday it would cut off gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices. Gazprom spokesman Sergei Kupriyanov said Moscow had no legal grounds to supply Ukraine with any more gas because Ukraine had not paid its bills.(AP Photo/Pavel Golovkin) (The Associated Press)

Russia's state-controlled gas producer Gazprom on Monday cut shipments to Ukraine in a dispute over prices and unpaid debts.

The decision came as Ukraine missed a payment deadline set by Gazprom, which said that from now on it will demand advance payment from Ukraine for any future supplies.

Customers in Europe, who receive Russian gas via pipelines crossing Ukraine, are unlikely to be affected during the summer, but the move raises the threat of supply disruptions in the fall.

Here is a look at what the parties want and why it matters.

RUSSIA:

The Kremlin and Russian gas officials demand that Ukraine settle a $4.5 billion debt for past gas supplies and pay $385 per 1,000 cubic meters of gas on future deliveries.

They say the price is similar to what Ukraine was paying until last fall and is on par with what Ukraine's neighbors pay for Russian gas.

Ukraine's pro-Russian former president, Viktor Yanukovych, got a much lower price of $268.5 per 1,000 cubic meters in December, as part of a Moscow bailout after he ditched a partnership pact with the European Union. Russia canceled all price discounts after Yanukovych was chased from power by protesters in February.

UKRAINE:

The cash-strapped government of Ukraine, which depends on Western loans to avoid bankruptcy, says it's willing to pay its gas debt if Gazprom drops the price for future deliveries back down to $268.5 per 1,000 cubic meters.

Ukrainian officials claim that price is market-based, even though it's significantly lower than what other European countries pay for Russian gas.

Ukraine accuses Russia of using gas as a weapon to punish it for its intention to integrate into Europe. The gas dispute comes amid a pro-Russian insurgency in eastern Ukraine that flared up after Moscow annexed Ukraine's Black Sea peninsula of Crimea in March.

WHY IT MATTERS:

European customers of Gazprom may face disruptions of supply in the winter if the dispute isn't resolved quickly, similar to cutoffs that came during previous Russian-Ukrainian gas wars in 2006 and 2009.

Europe gets about 30 percent of its gas from Russia, and about half of that goes via Ukraine. Some of the EU nations are even more dependent on Russian gas. Bulgaria, Slovakia and Hungary get 80 percent or more of their gas from Russia, while Poland, Austria and Slovenia get around 60 percent.

Ukraine now has about 13.5 billion cubic meters in underground storages, and the EU said those should be at 18-20 billion cubic meters at the end of the summer to ensure uninterrupted supply in the fall.