Critics accuse Gazprom, the largest natural gas producer in the world, refraining from market principles in favor of the foreign policy priorities of the Russian government, starting with the energy giant to cut off to Ukraine in January 2006. Suspected motive for the decision, however, seem to indicate the opposite: the company claimed that it had no other choice, because the parties were not able to conclude an agreement on the terms of future occupation. The case takes a look back in history with evidence that may resolve this paradox. This shows how politics shape the economy natural gas trade in the former Soviet Union and Europe, from the late 1960s to the late 1990s, sketches the history of creation Gazprom first post-Soviet Russian government, and describes how the construction of the new sovereign borders as a result of the collapse the Soviet Union, coupled with the political and economic transformation, have created serious problems in the gas trade between the former Soviet republics, with the greatest intensity occurring in Russian-Ukrainian relations. "Hide
by Ravi Abdelal, Soghomon Tarontsi Alexander Jorov Source: Harvard Business School 18 pages. Publication Date: August 26, 2008. Prod. #: 709008-PDF-ENG
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