Thursday, October 02, 2014

The Power Vertical

Podcast -- Spy Vs. Spy: Russia's Espionage Games

This Soviet-era poster warns citizens to "beware of spies."
This Soviet-era poster warns citizens to "beware of spies."
An indictment in the United States this week of 11 alleged Russian agents on charges of illegally exporting sensitive microelectronics through a Texas-based company has refocused attention on the Kremlin's espionage activities, which some analysts say have risen to Cold War levels.
But this isn't your father's looking-glass war. In the age of the Internet and social media, international espionage has entered a whole new dimension.
In the latest edition of "The Power Vertical Podcast," I discuss the new spy games with my regular co-host, Kirill Kobrin, and special guest Mark Galeotti, a professor at New York University who is an expert on Russia's security services and author of the blog "In Moscow's Shadows."
Also on the podcast, Kirill, Mark, and I talk about Russian President Vladimir Putin's upcoming birthday celebrations.

The Power Vertical -- Spy Vs. Spy: Russia's Espionage Games
The Power Vertical -- Spy Vs. Spy: Russia's Espionage Gamesi
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Listen to or download the podcast above, or subscribe to The Power Vertical Podcast on iTunes.

Tags: espionage,Vladimir Putin,Power Vertical podcast,Russian intelligence services

This forum has been closed.
Comment Sorting
by: La Russophobe from: USA
October 06, 2012 17:54
When was the last time a big ring of American spies was apprehended in Russia? Is the explanation that Americans are that much better at spying than Russia? Or is it that Americans are simply friendlier? Or do they consider Russia so pathetic it's not worth spying on? Any way you look at it, it's pretty humiliating for Russia. But not quite as humiliating as being caught stealing such pedestrian computer materials, and being exposed as being so unable to make them yourself. Putin's Russia is as backwards and pathetic as it has always been, stealing instead of inventing. That is the price of totalitarian society, and highlights the fact that Russia does not have one college in the world's top 200.
In Response

by: Mark from: Victoria
October 06, 2012 22:23
Meanwhile, the USA has three colleges just in the top five alone. And still, one-fifth of Americans surveyed believes the sun revolves around the earth, and Gallup gives Americans high marks for general knowledge because most know the event celebrated on the nation's most popular holiday, the 4th of July.

Surprisingly, 62.9 % of Republicans still believe Iraq had Weapons of Mass Destruction when the USA invaded in 2003, and 55.6% of Republicans have always believed President Obama was born in a country other than the United States.

How many Americans got their smarts from top colleges, and how many got them from talk radio anchored by blinding ignorance? You tell me.
In Response

by: Anonymous
October 07, 2012 16:04
Mark, who rates the colleges? The West, the East or … Russia?
In Response

by: William from: Aragon
October 07, 2012 22:31
Thanks Mark - let those facts speak for themselves. Not to mention that Russia is now the only world power with a space "shuttle" capability, and has the fastest military jet-fighter in the world. "'s not worth spying on", eh?
In Response

by: Mark from: Victoria
October 08, 2012 04:37
The ratings list I used came from a multinational organization called QS. The Director is a Brit from Nottingham, but the others are from all over. QS is headquartered in London. Although the group reports they speak an impressive cross-section of languages among them, we have no way of knowing how well they speak them and you have to go down as far as #18 on the list before you hit a college in which you could expect the main language spoken to be other than English.

Categories used to compile the score that decides where you rate on the list are Academic Reputation, Employer Reputation, Faculty-Student Ratio, International Faculty, International Students and Citations per Faculty.

One that's missing, and one in which Russia might do quite a bit better than many, would be "percentage of the total population which has a shot at a college education".

According to Wikipedia, over 50% of Americans claim to have had "some college", but it's difficult to say what good it did them because the percentage that obtained at least an Associate's Degree is less than 40%. That's still pretty good.

Over half of Russian adults, however, have completed university education, which is considerably higher than the USA and twice as high as the OECD average.
In Response

by: Anonymous
October 08, 2012 22:00
"Not to mention that Russia is now the only world power with a space "shuttle" capability, and has the fastest military jet-fighter in the world. "'s not worth spying on", eh? "

Testify, William! If you check out the link below on the Shkval torpedo, there is some delicious irony for you near the bottom; in 2000, an American "businessman" named Edmond Pope was arrested by the FSB for stealing state secrets - specifically, information on the Shkval torpedo - and consigned to the slammer for 20 years. He was pardoned later that same year by that soulless black hole of merciless evil, Vladimir Putin, on humanitarian grounds because he had been diagnosed with bone cancer.

Although he was posing as a businessman, Pope was a former Navy Captain who spent most of his U.S. Navy career in intelligence, and was the head of a private security firm. Some might not call him a spy, but those people would have sand in their ears. But wait, that's not the delicious part!

The original unguided straight-running Shkval was introduced in 1977. More than 20 years later, the United States government apparently thought it was still a secret worth stealing.
In Response

by: General Patton from: from grave
October 07, 2012 16:25
LaRuss this is my first and last warning. Russians hate Americans, and Americans are friendly to Russia. You will be sold for nothing when the time is right. Americans help Russia all their free time against Muslims countries occupied by Russia. They are so nice to Russia they even helped Russia to assassinate pro-independence Chechen president Dzhokhar Dudaev, they put Chechen/North Caucasus pro-independence movement into the terrorist list, and offered millions of dollars for their leaders' heads. Even before that they provided Studebaker lorries for Russians to commit genocide against Muslim North Caucasians via the land lease in 1944.
I call Russia and USA: Twix the sweet couple.
Oh! Wait! Take my words back, in 1993 the head of the Chechen intelligence Khozh-Akhmed Noukhaev said that Russia is the center of the world government. I guess the USA is her working bee.
In Response

by: Johnathan from: California
October 17, 2012 00:58
You people are idiots for comparing Russia and USA. These two superpowers has great people and you should show some respect for the people that work hard and try to do their best for a better world.

by: Konstantine from: Los Angeles
October 08, 2012 00:26
Thought it is a classic case of classic "movie" war,
Where legitimate secrets of some countries stolen,
It is a drop in a backet of barbarian Empires hore -
To plot torture, plagiarize, dissposses and kill all
That is not Cousins Emperors and their luers.

WW1 was not for national interests of nations,
But to murder at least 40 millions of the hated
By the Cousins scared by "Host of Revolution"
Innocent by standards men, as the moderated
Spy agencies and nations, conspire plagiarize.

It could be, wile sucking of me blood of Jesus,
The danceling on "Bundershaft" CIA and KGB
Relaxed a bit, and as a gift to Putin, the hoses
Of Russian sucking sent a gift as spying bees.
The gift before that was murder of my mother.

by: Ray F. from: Lawrence, KS
October 08, 2012 01:07
Nice report and have to agree 100% on the folly and waste of most espionage work. The Russians aren’t alone in creating elaborate surveillance bureaucracies whose main function is to protect their turf and salaries (all under the guise of ‘protecting national security’). The Department of Homeland Security is a gross example of this government-sponsored scrutiny. From my pedestrian background in intelligence work, I would wager that 90% of all valuable information can be derived from open sources or merely making a couple of phone calls. The Russians suffer more from this mania, as many don’t appear to believe that access to open information helps to strengthen all fibers of society, and not just those wearing trench-coats and sunglasses.
In Response

by: Mark from: Victoria
October 08, 2012 17:34
Well said, Ray, not to mention accurate. Astonishing things that would have made intelligence professionals drool as little as 20 years ago are now available in open source if you are patient and know how to search. The trick now is to sort the believable from the hedged or deliberately fabricated in open-source data, and that can often be achieved by comparing claimed performance figures with known capabilities, to use one example. However, there is the occasional breakthrough when a certain medium has hit a design wall and cannot be made to go further, or faster or smaller or whatever.

An example is the Shkval torpedo. When torpedo design had evolved about as far as was possible and improvements had become mainly those of incremental efficiency, it was Russian designers who thought of a torpedo driving through air rather than through water, and routed the exhaust so the Shkval drove through a continuous column of its own bubbles. This resulted in a torpedo of fearsome speeds, although it is a straight-runner and not guided. But you don't have an awful lot of time to get out of the way. All open-source information. This source

suggests there is a homing version, which would be bad news indeed, but it must slow to the characteristics of a conventional torpedo to do so.

Sudden leaps of unconventional thought are certainly not limited to Russian engineers, and western and Asian designers can offer many examples of conceptual visualization that stagger the mind. It's a pity, in all those cases, that people could not bend their minds more to aiding one another than destroying one another or seizing a momentary advantage. But therein lies the true beauty of open source information.
In Response

by: Andrew from: Auckland
October 09, 2012 14:59
Well, the Shkval is fast, but its range is limited to about 5 miles/11km maximum, so its utility is doubtful at best under modern combat conditions, considering the Mk48 ADCAP has a range of 30 Nautical Miles or about 55km, well you get the idea.

Its very much like taking a knife to a gunfight.

In Response

by: Mark from: Victoria
October 10, 2012 02:28
"... its utility is doubtful at best under modern combat conditions, considering the Mk48 ADCAP has a range of 30 Nautical Miles or about 55km, well you get the idea.

Its very much like taking a knife to a gunfight."

Is that so? Once a technology is established, evolving it is much easier, and the Shkval 2 is said to have a much longer range.

However, I question whether it needs it. Conventional torpedoes in the Russian inventory are quite capable, and the role of the Shkval is not employment as a conventional torpedo - it is a countermeasure that forces an enemy who has just launched a torpedo itself to maneuver violently and cut its guidance wires in an attempt to avoid. The ADCAP is just like any other torpedo once it begins pinging as it reaches its "enable" point.

As a submariner I would want to know without a doubt that I was beyond range of the Shkval before I would ignore its release and concentrate on my own torpedo engagement. Could you be that cool, and that sure? The transmission of sound underwater is affected by a lot of anomalies, and the only way to be sure is to ping the target yourself (good luck from 30 miles) or have other antisubmarine assets establish its position for you by dropping active sonobuoys. If the submarine you are looking for is below the layer, again; good luck. All those techniques take time, and you have seconds to make up your mind - do you continue with the engagement, or cut your wire and maneuver to avoid?

And despite what the movies might have told you, submarine-on-submarine engagements that take place at 55 km separation are a dream which depends on an anomalous water environment that might come along once in a decade.
In Response

by: Andrew from: Auckland
October 11, 2012 11:32
Mark, it is easy to see you are FOS.
An increase in range from 11KM to 15KM is marginal.

Also the Shkval suffers from one little problem under the scenario envisaged. While the MK48 is bearing down on you from the close range you envisage, the captain of the Russian sub has to find range and bearing to the target, then turn and launch his super fast but short range "make the enemy evade" unguided torpedo. By which time he is probably dead, better to drop a countermeasure such as a noisemaker and take evading action.

And if there is a guided version that has to slow to the speed of a conventional torpedo that is a waste of time.

And BTW, I am not talking about submarine engagements from "movies" but those from exercises.

In addition, Russian submarines have been found time and again easy to sneak up on by western navies, hell even a Collins class (described by both the US & RN as hideously noisy) are able to manage it, so a LA class or the new RN Astute class should have no problems whatsoever sneaking up on them.

You do also realize that when torpedoes such as the Mk48 reach their enable point they are self guiding don't you? In fact they can be switched to active mode by cutting the cable, this means they are less resistant to countermeasures than when wire guided, but still deadly weapons.

As for sound underwater being affected by anomalies, of course, but the highly trained sonar operators not to mention the computer systems utilized in the sonar systems onboard modern submarines enable them to have a very very good idea of what is going on around the boat for some considerable distance around often to a greater distance than active sonar, also the fact that USN submarines operate as part of a C3 system involving a CBG air wing with Seahawks etc, so you will almost invariably have people dropping sonar buoys and trying to box in the target.

As for being beneath the layer, well you have been watching too many films good sir. The thermal layer causes a shadow zone at certain angles to the listening ship/submarine, but is most certainly not a blanket effect.

In Response

by: Mark from: Victoria
October 11, 2012 23:14
You should call up the USN, Andrew; I'm sure they'd be very interested in your revelations on the propagation of sound in water.

The Shkval does not need to be matched for range and bearing. It only needs to be fired in the approximate right direction. It will be identified immediately by its speed as what it is. It is not intended to actually hit the enemy submarine, merely to present the possibilty that it could. I don't know where you're getting your figures, but no new range was given for the Shkval 2 - just that it would be significantly increased.

The thermal layer does not of course cover the entire ocean like a blanket, and nobody suggested it does. It is also most assuredly much bigger than just submarine-sized - what the hell do you think dipping sonars and towed arrays are for? To get under the layer - why bother if it's only 300 square yards?

It may surprise you to know U.S. submarines on patrol do not typically betray their presence by traveling with a road show of Seahawks flinging sonobuoys everywhere. Who goes along with these helicopters to refuel them? They must have incredible endurance. When they are traveling with a Task Group or squadron underway, indeed antisubmarine warfare is a group effort, but that is the exception for U.S. submarines rather than the rule, and they customarily operate independently - even when traveling with a task group they are frequently far ahead.

I remember a few years ago when a Russian submarine, likely a Victor II, briefly lost depth control while directly underneath the U.S. Carrier KITTY HAWK when it was in the center of its task group. The carrier had to go back to Yokusuka for repairs because the Victor had accidentally left a prop blade sticking in the hull. It somehow managed to get right into the centre of the destroyer and frigate screen and directly under the carrier close enough to touch it. Quite an achievement for something that is so noisy you can hear it from the front row of an Eminem concert. Either that, or all the sonar rates were asleep. Because nobody knew it was there, or ever would have if not for the accident.

The fact remains that the USA was caught trying to steal information on the Shkval more than 20 years after it was operational. If it's like taking a knife to a gunfight, why bother?
In Response

by: William from: Aragon
October 08, 2012 21:37
Good points, Ray - both sides have a well developed "security industry" with both sides dependent on "double-agents" (dating back to the Oleg Penkovsky days). Much of the intelligence information is coming from the same sources.

by: Anonymous
October 11, 2012 03:29
This Soviet-era poster warns citizens to "beware of spies."
The guy on the right: "Vanya, look at my finger"
The guy on the left: "Misha, my love, I want to hug and kiss you"
The American spy in the back: "Darn it, I knew Russia has a 'happy' army".
But honestly, too much subliminal messages on the picture.

The Power Vertical Feed

LIVE In this space, I will regularly comment on events in Russia, repost content and tweets I find interesting and informative, and shamelessly promote myself (and others, whose work I like). The traditional Power Vertical Blog remains for larger and more developed items. The Podcast, of course, will continue to appear every Friday. I hope you find the new Power Vertical Feed to be a useful resource and welcome your feedback. More


From RFE/RL's News Desk:


Russian President Vladimir Putin has told potential investors in Moscow that "unwarranted" Western sanctions won’t stop the economy from developing.

In a bid to calm investors, Putin told an investment conference on October 2 that Russia remains committed to developing an economy that is “strong, flourishing, free, and open to the world."

Prospects for foreign investors in Russia have been dampened by Western sanctions over Moscow's role in the Ukraine crisis.

Putin said Russia aims to “actively” use national currencies in trade deals with China and other countries -- implying a shift away from the U.S. dollar.

He also said Moscow doesn’t plan to introduce restrictions on cross-border capital and currency movements after a dramatic decline of the value of the ruble.

Putin also said the state is prepared to support economic sectors and companies that are being hit by sanctions.

(Based on reporting by Reuters, AFP, TASS, and Interfax)


Russian authorities say they have launched an investigation against Ukraine's defense minister and other senior military officials. 

The spokesman for the Russian Investigative Committee, Vladimir Markin, announced on October 2 that Ukraine's military leadership, including Defense Minister Valeriy Heletey and General Staff chief Viktor Muzhenko, is facing genocide and war crimes charges.

On September 29, Russia accused top Ukrainian political and military leaders as well as nationalist organizations of committing "genocide" against Russian-speaking people in eastern Ukraine. 

Ukrainian authorities dismissed the accusations and opened a criminal investigation against officials of Russia's Investigative Committee.

Ukrainian forces and pro-Russian separatists have been fighting for six months in eastern Ukraine, leaving at least 3,000 people dead and causing hundreds of thousands to flee their homes.

(Based on reporting by TASS and Interfax)


Rebel forces in eastern Ukraine are pushing to capture the government-held airport in the city of Donetsk. 

The Ukrainian military said on October 2 that pro-Russian separatists continued an offensive begun the previous day, on "a broad front."

Army spokesman Vladyslav Seleznyov said Ukrainian forces repelled four attacks on the airport in the evening of October 1, destroying a tank and killing seven rebels. 

The rebels used tanks, multiple-launch rocket systems, artillery, and mortars, Seleznyov added, resuming their attacks on the morning of October 2. 

Aleksandr Zakharchenko, prime minister of the self-proclaimed Donetsk People's Republic, was quoted as saying on October 1 that separatist forces control “90 percent of the airport's territory” and plan to have it fully under their control “in two or three days at most."

The airport has been a focus of fighting between government forces and the insurgents despite a September 5 cease-fire in the conflict which has killed more than 3,000 people since April.

Meanwhile, shelling has repeatedly been reported in the rebel-held city of Donetsk.

On October 2, Interfax reported that the city became the target of an artillery strike a day after about 10 people were killed in shelling in the rebel-held city.

Three people were reported killed on October 1 when a shell exploded on a school playground, while several others died when a shell hit a minivan on a nearby street.

The blasts occurred as pupils returned to school after the start of the school year was postponed from September 1 due to fighting.

Meanwhile, diplomatic pressure on Russia continued as German Chancellor Angela Merkel told Russian President Vladimir Putin via phone on October 1 that Moscow has a duty to exert influence on the separatists in Ukraine. 

According to a German government spokesman, the two leaders expressed concerned that violence was still being used in Ukraine every day.

Merkel said the border between Ukraine and Russia needed to be monitored and the Organization for Security and Cooperation in Europe (OSCE) had a big role to play in that. 

Earlier, new NATO Secretary-General Jens Stoltenberg said the cease-fire in Ukraine offers an opportunity but Russia still has the power to destabilize the country.

Stoltenberg also had conciliatory words for Russia, saying he saw no contradiction between aspiring for a constructive relationship with Moscow and being in favor of a strong NATO.

(With reporting by Interfax and the BBC)


Russian President Vladimir Putin has expressed hope that Ukraine's parliamentary election later this month will help bring stability to the country.

Addressing the annual "Russia Calling" investment conference in Moscow on October 2, Putin said economic and political stability in Ukraine was in Russia's interests.

The Russian president said Moscow wants a "predictable" and "reliable" relationship with Ukraine and that he regards the former Soviet republic as Russia's "most brotherly" nation.

The elections to the Ukrainian Verkhovna Rada are scheduled for October 26.

Government forces and Pro-Russian separatist continue to battle in eastern Ukraine despite a September 5 cease-fire in the conflict which has killed more than 3,000 people since April.

(Based on reporting by Reuters and Interfax)

And here are some comments by Putin at the annual VTB Capital investment forum in Moscow.

On Ukraine:
"Russian national interests will be met if Ukraine exits its political and economic crisis -- and this country has indeed plunged into a deep political and economic crisis -- restores its economy, political, social spheres. We are interested in having a reliable and predictable partner and neighbor."

"I hope that both Ukrainian parliamentary election is conducted with dignity and a long awaited political stability sets in. However, I cannot fail to mention that we expect all people living in any part of Ukraine to be able to fully enjoy their rights enshrined both in the international and Ukrainian law, that no one is discriminated either for the language they speak, or ethnicity they belong to, or religion they follow. This is the only way to preserve the country's territorial integrity and the only way to return it its unity."

On charges of money laundering in a deal to acquire a regional oil company against one of Russia's richest businessmen Vladimir Yevtushenkov:
"There will be no review of the results of privatization [in Russia] on a massive scale. At the same time, one case always differs from another both systematically and qualitatively. Thus if law enforcement authorities found either [privatization matters] or asset movements questionable, we have no right to deny them their duty to investigate this particular case and make a decision."

"I hope all pending decisions will be made in the realm of civic laws and arbitration rather than that of the criminal code. In any case, I am not going to interfere and I am not going to issue any policy directives."






Good morning. Here are a few items from RFE/RL's News Desk:


German Chancellor Angela Merkel says Russia has a duty to exert influence on pro-Russian separatists in eastern Ukraine.

Merkel made the remark during a phone call with Russian President Vladimir Putin on October 1.

According to a German government spokesman, the two leaders expressed concerned that violence was still being used in Ukraine every day.

Merkel said the border between Ukraine and Russia needed to be monitored and the Organisation for Security and Cooperation had a big role to play in that. 

She said Germany would continue to support the OSCE mission in Ukraine, adding it could play an important role in planned local elections in the regions around Donetsk and Luhansk. 

Earlier, NATO's new Secretary-General Jens Stoltenberg said the cease-fire in Ukraine offers an opportunity but Russia still has the power to destabilize the country.

(Based on reporting by TASS and Reuters)


Russia's child-protection ombudsman has linked Moscow's decision to suspend participation in the Future Leaders Exchange Program (FLEX)  to a gay American couple that established guardianship over a Russian high school student who was in the United States for the program.

Pavel Astakhov said on Twitter ( on October 1 that Washington had violated its obligation to return Russian students to their country when  "a Russian teen stayed behind in the United States."

Astakohov said a homosexual couple established illegal "guardianship" over the boy.

But the U.S. administrator of the program says the events described by Astakhov occurred after the child had completed the exchange program and that the student's host family was not a same-sex couple as Russian officials have implied.

U.S. Ambassador John Tefft expressed regret over Russia's decision to withdraw from next year's FLEX program.

(With reporting by TASS and Interfax)


NATO's new Secretary-General Jens Stoltenberg has said that the cease-fire in Ukraine "offers an opportunity" but says Russia still has the power to destabilize the country. 

Stoltenberg, speaking on October 1 in Brussels at his first news conference as NATO leader, said Russia must comply with international law and demonstrate it is respecting its international obligations.

He said: "We see violations of the cease-fire" in Ukraine.

But the new NATO chief said he saw no contradiction between aspiring for a constructive relationship with Russia and being in favor of a strong NATO.

Stoltenberg, a former two-term Norwegian Prime Minister, is NATO's 13th secretary-general in the trans-Atlantic organization's 65-year existence.

He replaced Danish former Prime Minister Anders Fogh Rasmussen. 

(With additional reporting by Reuters and AP)


Russian Foreign Minister Sergei Lavrov said after meeting in Moscow with North Korea’s Foreign Minister Ri Su Yong on October 1 that he sees a possibility for six-party talks to resume on Pyongyang’s nuclear program.

But Lavrov said the resumption of the talks "will take a certain amount of time – not immediately."

He said the main conditions are "to achieve from all sides a calm, balanced approach" and to avoid "any abrupt steps that would only polarize positions."

North Korea, South Korea, Japan, China, Russia, and the United States began talks in 2003 with the aim of ridding the Korean peninsula of nuclear weapons.

But Pyongyang withdrew in 2009 and indicated it would not abide by a 2005 pledge to abandon its nuclear programs.

Ri, who is on a 10-day visit to Russia, said a "long tradition of relations" between Moscow and Pyongyang is "bonded with blood."

(Based on reporting by TASS and Interfax)

And this, via Reuters:


By Michael Kahn and Jan Lopatka

PRAGUE, Oct 1 (Reuters) - The cat and mouse game between Europe and Russia on gas intensified on Wednesday with Slovakia saying its supply from Russia was down by a half and its prime minister calling the move part of a political fight.

Since September, Russia's state-controlled Gazprom has sent less-than-requested deliveries to Poland, Slovakia, Austria and Hungary - after the European Union began sending gas to Ukraine - in a clear warning from Moscow ahead of the winter heating season which officially starts today, when the industry switches to higher pricing.

The 50 percent cut reported by Slovakia, a major transit point for Russian gas exports to Europe, was by far the deepest yet, and Prime Minister Robert Fico said he would call a crisis meeting of his government if the problems persisted.

Fico, who normally has warm relations with Russia and has criticised EU sanctions against it, said he saw political factors behind the cuts.

"The Russian side talks about technical problems, about the necessity of filling up storage for the winter season," Fico said. "I have used this expression and I will use it again: gas has become a tool in a political fight."

There was no immediate comment from Russian gas exporter Gazprom

Slovakia's western neighbour the Czech Republic became the latest former Soviet-bloc nation to experience reductions. RWE Czech Republic, its main gas importer, said it saw unspecified reductions on several days over the past week, although the flow seemed normal on Wednesday.

It was unlikely there will be any impact for now on consumers of gas in the Czech Republic, Slovakia, or the countries further West that receive it via there, because gas storage reservoirs throughout Europe are close to full.

As well as shipping Russian gas west, Slovakia also sends it east into Ukraine. That has irked Russia, which switched off gas deliveries to Ukraine to persuade Kiev to pay its arrears.

"Nobody should be surprised by what Russia does. They want to keep pressure on Ukraine... at the start of the heating season," said Michael LaBelle, a gas expert at the Central European University in Budapest.

Central European spot gas markets rose to over 25 euros ($31.52) per megawatt-hours (MWh), their highest levels since the Ukraine crisis broke out in February/March.

Russia is Europe's biggest supplier of natural gas, meeting almost a third of annual demand and in return, Gazprom receives around $80 billion in annual revenues from its European customers, making up the majority of its income.

Moscow halted gas flows to Ukraine three times in the past decade, in 2006, 2009 and since June this year, although this year gas for the EU via Ukraine has so far continued to flow.

Opening up gas flows eastward was part of the EU's response to Gazprom's decision to cut supplies to Kiev in June. Slovakia, Poland and Hungary can also send gas to Ukraine but so far deliveries have not been without incident.

Poland temporarily stopped deliveries to Ukraine last month after Warsaw said it was getting less gas from Russia than requested. Hungary stopped eastward supplies last week in order to fill its own storage tanks ahead of winter.

Slovakia, with the largest EU capacity to Ukraine, had maintained deliveries.

Analysts agree the moves are a warning to Europe that Russia is ready to retaliate should Brussels impose further sanctions on Moscow over its intervention in Ukraine.

"It (the Russian export reductions) could actually be in the end quite harmless. But the fact that they did not tell anyone in advance, (shows) that nobody should trust any explanation he or she gets, and that in itself is damning," Czech energy security ambassador Vaclav Bartuska told Reuters this week.

He added it would be foolish to expect gas to flow as usual through Ukraine this winter.


Traders have, however, pointed out that Russia's recent reductions to Europe, at least before the latest cuts to Slovakia, were within contractual allowances and came during times that EU gas storage tanks are well filled.

Gas Infrastructure Europe data show that the EU's gas storage sites are filled to an average of over 90 percent, compared to just 68 percent this time last year.

"Most of the EU has its gas tanks filled to the rims, so they don't need more gas at the moment, while Gazprom needs to still fill its domestic reserves ahead of the Russian winter, so I'm not surprised by its flow reductions to the EU, which were all within contractual allowances," one EU utility trader said.

While gas deliveries to Germany, Gazprom's biggest customer, should continue through the Nord Stream pipeline which bypasses Ukraine, the outlook is far less certain for central and southeastern European nations which receive most or all of their imports from Russia and via Ukraine.

To deal with a potential shortfall this winter, the European Union has prepared emergency plans and has also sought a compromise to safeguard winter supplies in a potential deal that would guarantee Kiev at least 5 billion cubic metres of Russian gas for the next six months if Ukraine made pre-payments.

The Russian energy ministry said on Wednesday that there would be not further gas talks with Ukraine and the European Commission this week. (1 US dollar = 0.7933 euro) (Additional reporting by Vera Eckert in Berlin; Writing by Henning Gloystein and Christian Lowe; Editing by William Hardy)



The always insightful -- and often provocative -- Alexander Motyl has a piece up at Huffington Post suggesting the Western and Russian positions on Ukraine are irreconcilable.

"Should the West therefore try to understand Russian perceptions even if it knows that they are completely wrong? Obviously, understanding Russian delusions can help the West and Ukraine craft a better response to Putin's expansionism. But it makes little sense to say that the West and Ukraine should try to accommodate these delusions in their search for peace in eastern Ukraine and the Crimea.

Should the democratic world have accommodated Hitler's perceptions of Jews? Or of Germany's need for Lebensraum? Or of the innate superiority of the Aryan race? The questions are rhetorical, but they are exactly the ones we should be asking about Russian perceptions.

The implications for policy are clear. Finding a compromise under such conditions may be impossible. And agreeing to disagree may be the best one can possibly achieve. Russia currently controls the Crimea and one third of the Donbas region in eastern Ukraine. Let it continue to do so. The West has imposed sanctions on the Russian economy and supports Ukraine. Let it also continue to do so. Finally, Ukraine has adopted a defensive position and appears intent on preventing further Russian incursions into its territory. It, too, should continue to do so.

There is no practical solution to the Russo-Ukrainian war. The most one can hope for is to "freeze" it and thereby transform hot war into cold war between Russia and Ukraine and between Russia and the West. That cold war will continue as long as Putin remains in power and continues to promote his delusional views of the world." 

Read the whole piece here.

Semyon Guzman, a prominent Ukrainian psychiatrist, says Vladimir Putin hasn't gone crazy -- he's just evil.

"Many really consider that he suffers from definite psychological illnesses,” Guzman wrote in a September 30 article (a big h/t to thei ndispensable Paul Goble for flagging this).  

"This is only a convenient explanation in the existing situation. Unfortunately, it is not correct.”

Putin's character traits, "ike those of a murderer, thief or other good for nothing, are not psychiatric phenomena but rather objects of the subjects of moral philosophy.” Guzman wrote. He added that Putin was "absolutely responsible" for his actions.

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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or