There appear to be two counter-opposing narratives circulating out there in response the latest natural gas agreement between Russia and Ukraine, as well as Vladimir Putin’s provocative suggestion that Gazprom could swallow up Naftogaz. 

On the one hand, there is the view that the Russian government has scored a major coup in its bid to gain control of the Ukrainian economy, and that in this aggressively political business deal, Moscow has set forth an example of its expansion of empire.  Craig Pirrong described it as part of Russia’s economic “anchluss” of Ukraine, arguing that this could have a profound impact on domestic politics, while other panicked observers see this as the end of Ukrainian sovereignty and independence.  Alexander Rahr sees it as a sneaky move that Europe would somehow have prevented if they didn’t have Greece weighing on their mind:  “This is pushy. It’s Putin’s way of negotiating, of showing that Russia is on the winning side.”

On the other side, there is a celebratory feeling among some in Russia that they have turned back the clock to the halcyon days of Leonid Kuchma, and that there not won’t be anymore of those gas wars we have come to expect every New Year.  Derek Brower, an energy reporter who used to blog here, has punched up a piece titled “Peace at last,” while President Viktor Yanukovych declared an end to the period of confrontation with Russia.

Naturally these two views aren’t mutually exclusive … perhaps the Kremlin has successfully used Gazprom to begin the annexation of Ukraine and there will no longer be any problems in the gas trade.  I don’t really believe that either is true.