Jonathan Stern, director of gas research at the Oxford Insitute of Energy Studies, said Russia's pledge to pay Central Asian gas suppliers "international prices" for gas from Jan.1 meant a huge increase in the price Russia demands from Ukraine.


"Essentially they're going to try to impose a price on Ukraine that Ukraine can't pay. And I can see that we're sleepwalking towards the end of the year and that price has got to be agreed, and I think we could see a replay of 2006," Stern said. "We could have a major blow-up in January again."

The European Union gets about a quarter of its gas from Russia, and 80 percent of that is piped across Ukrainian territory. In 2006, a dispute between Ukraine and Russia's gas monopoly Gazprom led to brief supply cuts to the European Union, sparking a barrage of political complaints.