This is extremely odd, but the stakes here were relatively small, though of great importance to the company. The same cannot be said of the wider Ukrainian gas resource, which has lain dormant since 1991. Ukraine has well-known and potentially very rich hydrocarbon resources in several areas. But until very recently Kiev showed little interest in exploring these prospects. This inactivity might just be indolence and stupidity, compounded no doubt by greed — all foreign oil companies are subject to egregious demands for "sweeteners". But Russia has a clear interest in discouraging Ukraine from developing its oil and gas resources. Given the links between the Kremlin and all Ukrainian leaders since independence in 1991, it is not hard to see how this might happen.

 

There is great interest from Western oil companies. Last year Shell signed a $10 billion contract to explore for shale gas in the eastern (Russian-speaking) part of the country.  No work had been done before the Crimean crisis blew up, and now the new parliament in Kiev is demanding that the contract be revisited. More problematic, given the focus of current tension, are the rich waters of the Black Sea south of Crimea, where Exxon Mobil has an exploration deal. Although deep and therefore expensive to develop, this area may contain enormous amounts of oil and gas. If Russia successfully annexes Crimea, it will gain control of this resource as well.

The Russians regard Ukraine as a terrible liability which threatens their vital gas trade with Europe. The original Soviet export pipelines all transited Ukraine, but since 1991 the Russians have been finding ways to bypass the bottleneck. First they built the Yamal-Europe pipeline, which transits Belarus and Poland. Then, with the help of former German Chancellor Gerhard Schröder, they built the North Stream pipeline, which runs offshore through the Baltic to Germany. This has reduced the leverage that Ukraine has over Russian exports, but in 2013 55 per cent still passed through Ukraine. This could be reduced to about a third by maximising usage of North Stream.

Whatever happens with Crimea, Europe is relatively insulated from further supply shocks in 2014. The mild winter has left high levels of stocks in Western Europe and in Ukraine itself, and heating demand will fall further as spring progresses.

That may not bother Putin unduly. If, as seems likely, the campaign to drag Crimea and eastern Ukraine back to Mother Russia is intended as a long one, he will be content that European consumers are not worried about supplies in the short to medium term.

There has been much loose talk in recent weeks about US shale gas coming to the rescue of Europe. This is not a runner. Although the US is allowing the construction of a number of LNG terminals intended to liquefy its shale gas surplus for shipment to world markets, first exports are 18 months away, and the huge volumes that would be needed to replace Russian supply to Europe are at least a decade off. More importantly, US LNG will follow the market, and that means, for the time being, shipping to the Far East, which is prepared to pay almost twice what Europe pays for Russian gas.

As Vladimir Putin might say, not such a bad deal after all.