ABSTRACT
This chapter explains how Russia implemented a strategic plan that expanded Russia's influence in all sub-sectors of the gas industry in Europe and the CIS countries by launching Gazprom's entry into extraction, storage, transportation, distribution, and selling of natural gas in these countries. The foreign policy of Putin's Russia includes both flirting with West and Asia and using contradictions among them to set their interests against each other, as in case of Iran. The "Orange" Government declared the European and Euro–Atlantic integration key priorities of Ukrainian foreign policy. Although there were no particular dates for entering NATO and the EU, Yushchenko activated cooperation with these institutions. A growing flow of oil and gas revenues allowed Putin to transform a semi–poverty-ridden and poorly governed country into a serious world political and economic actor. Decreasing gas supplies during the winter was chosen as an instrument of economic and political power because it is the most perceptible way of influencing a neighbouring state.
