Soviet Black Sea Fleet
After the dissolution of the Soviet Union, Russia and Ukraine argued over possession of the Soviet Black Sea Fleet, which is based in Crimea. In 1997, after several years of negotiation, agreement was reached on how to divide the fleet. Ukraine ended up with only a small proportion of the ships, but kept the shore facilities (though agreeing to lease some of them back to Russia).
Tensions between Ukraine and Russia rose in 2008 after President Yushchenko stated that Ukraine would not extend Russia’s lease of Black Sea Fleet facilities after 2017, and urged the start of preparations for its departure.
Russian Navy Flagship anti-submarine ship "Kerch" fires a live rocket during the Ukraine-Russia joint naval exercises not far from Sevastopol, Crimea. 31 October 1997 (©AP/Wide World Photo/Vladimir Strumkovsky)
Russian use of Black Sea Fleet ships during its war with Georgia in August 2008 presented another problem for Ukraine, which sided with Georgia during the conflict. Yushchenko subsequently signed a directive requiring Russia to notify Ukrainian authorities of all movements by Black Sea Fleet naval vessels and aircraft. Russia asserted that this contradicted the 1997 agreement.
The Evolving Status of Crimea
Newly-elected Ukrainian President Yanukovych agreed in 2010 to extend Russia’s lease of naval facilities in Crimea from 2017 for another 25 years with an additional five-year renewal option, in exchange for a multi-year discounted contract for Russian gas. The Ukrainian opposition sharply criticized the deal. Former PM Tymoshenko asserted that the Constitution forbid the continuation of foreign bases after 2017.
Ukrainian President Yanukovych, was ousted in February 2014 and fled to Russia following months of protests. Russia claimed the ouster was a coup and that the new Ukrainian authorities were nationalist fascists who would abuse Ukraine's large ethnic Russian population. The grass roots movement and widespread demonstrations that sparked the ouster of Yanukovych and the ascent of a pro-west interim Ukrainian government created a political crisis in Ukraine that led to demonstrations against the new government. These were quickly supported and exploited by Russia. When the Crimean prime minister Anatoly Mohyliov announced that his government recognized the new provisional government in Kiev, and that the Crimean autonomous government would carry out all laws passed by the Ukrainian parliament, counterdemonstrations by predominantly pro-Russian groups quickly spread.
On 27 February, 2014, unidentified soldiers, presumed to be Russian special forces, seized the Supreme Council of Crimea and the building of the Council of Ministers, quickly raising Russian flags over the buildings. The Crimean Parliament then voted to terminate the Crimean government, and replace Prime Minister Mohyliov with Sergei Aksyonov, leader of the fringe Russian Unity party.
Aksyonov then asked Russian President Putin for "assistance in ensuring peace and public order" in Crimea, claiming that Yanukovych remained the legal President in Ukraine. Putin then was given authorization from the Federation Council of Russia for military intervention in Ukraine until the situation "normalized." By 2 March, Russian forces had moved into Crimea and soon were in control over the entire Crimean Peninsula.
Russia annexed Crimea from Ukraine in March of 2014 after a hastily called referendum just two weeks after the Russian forces took control of the Black Sea region. While Ukraine and the West have rejected the vote, .
The status of Crimea remains one of the main points of contention between Ukraine and Russia. Ukrainian Foreign Minister Pavlo Klimkin noted in March 2015 that without "establishing full Ukrainian sovereignty over Crimea" there could be no way to "normalize or get back to business in the relations between Ukraine and Russia."
Ukraine and Russia have engaged in recurring disputes over payments for Russian natural gas, often resulting in cut-offs of shipments. Ukraine currently buys Russian gas under a 2009 ten-year contract that links the price of gas to that of oil. Ukraine is also obligated to buy 40 billion cubic meters of gas a year, which is more than Ukraine wants and at a price more than it wants to pay.
Russian President Putin and Gazprom CEO Miller publicly proposed building a new pipeline to ship Russian gas to western Europe through Poland -- bypassing Ukrain e-- in 2013. Miller followed this up with a threat that Gazprom would "never, under any circumstances" use Ukraine's extensive gas storage system to deliver Russian gas to Europe unless Ukraine agreed to a partnership with Gazprom. If Kyiv had forgotten, Moscow reminded it of Russian energy/economic leverage over Ukraine.
At the same time, Ukrainian purchase of Russian gas has decreased by 75 percent since 2011. Russian gas delivery through Ukraine has also dropped by a third since its high in 2004, and Gazprom has no other similar gas storage system to that in Ukraine available.
As the 2014 crisis over Crimea continued, Gazprom demanded that Ukraine settle its $1.89 billion debt or it would cut off gas shipments. Russia and Ukraine have been negotiating a new price -- Ukraine had been paying a subsidized rate lower than Gazprom's European customers. Russia has proposed a 44 percent price increase, and reduced supplies by half earlier this year.
In June 2014, Gazprom stopped supplying natural gas to Ukraine after it failed to pay its outstanding bill. However, Ukraine and Russia, facilitated by the EU, reached an agreement in October of 2014 that resumed the flow of gas supplied from Russia to Ukraine.
Inconclusive high level visits
Yanukovych's visit to Moscow in 2012 did not result in agreements on outstanding issues in the bilateral relationship. These include Ukrainian interest in a discount on gas prices, inventorying of property in Crimea leased to the Black Sea Fleet, arrangements on Fleet movements (notification procedures, timing and responsible authorities), and Russian interest in modernizing/replacing its increasingly obsolete ships.
Putin's return visit to Kyiv in July 2013 took place against the backdrop of Russia's push for Ukrainian entry into the Moscow-led Eurasian Union. In addition, Putin publicly pushed for the integration of the armed forces of the two countries in an address made to both navies in Sevastopol. Yanukovych supported defense cooperation, but far short of Kyiv's consent to modernization of the Black Sea Fleet or allowing Ukrainian defense contractors to take part in such naval modernization.
Ukraine’s geopolitical dilemma
Ukraine has steered a cautious course between Russia and the West. One reason is Ukraine’s geopolitical dilemma. While Ukraine has had some Western support, there are no realistic prospects for it to join the EU or NATO in the near term. Ukraine’s relations with the West have been strained by such issues as the fate of the Chernobyl nuclear power station and the absence of significant economic reform, and more recently by Ukraine’s failure to act effectively against economic crime, and politically-motivated trials of opposition figures. (see Challenges to Ukraine's Democracy). Meanwhile, the Ukrainian economy, including the arms industry and the energy supply, depends heavily on close ties with Russia. In defense issues as well, Ukraine has taken advantage of the opportunities provided by the Russian-led Collective Security Treaty Organization (CSTO) to participate in air defense and air force exercises, while doing he same with NATO's Air Situation Data Exchange Program.
Divergent wishes of eastern and western Ukraine
Another constraint on Ukraine's foreign relations with both Russia and the West is the divergent wishes in large groups in eastern and western Ukraine. Many in eastern Ukraine want closer ties with Russia and more effective cooperation within the CIS, while many in western Ukraine want Ukraine to keep its distance from Russia and leave the CIS altogether. By way of compromise, Ukraine has remained a member of the CIS but blocked its development into an effective supranational union. Ukraine has been willing to cooperate with other post-Soviet states only on conditions that preserved its full sovereignty. For example, Ukraine has rejected Russia’s view that CIS member-states are collectively responsible for defending the “external borders of the CIS.”
Russian-sponsored international economic institutions
Ukraine maintains observer status in the Eurasian Economic Community.
Russia occupies Crimea
In response to Yanukovych's ouster and the change of government in Kyiv, Russian military forces occupied Crimea at the end of February 2014 and annexed it the following month.
Russian military pressure on Ukraine
Russia has been conducting military maneuvers and overflights along its border with eastern Ukraine, threatening to protect Russian interests and ethnic Russians if Ukrainian authorities act against pro-Russian groups that have seized public building and facilities in eastern Ukraine.
Putin announced on May 7 that Russian forces had withdrawn from along the border with Ukraine (withdrawal of significant forces was finally confirmed as happening towards the end of May), asked Russian separatists to drop their plans for a referendum on sovereignty on May 11 (they held the referendum anyway), and said Russia would accept the May 25 presidential election if demands for autonomy from eastern Ukraine were recognized. On May 23 Putin said he would respect the results of the presidential election.
Nonetheless, hundreds of purported Russian civilians have crossed the border into eastern Ukraine and engaged in armed attacks, including against the Donesk Airport in late May and a Ukrainian border guard base in Luhansk on June 2.
NATO Secretary-General Rasmussen stated on June 19 that several thousand more Russian troops had deployed to the border with Ukraine and that Russian troop maneuvers were taking place in the area.
Speaking at an August 28 press conference on the most recent Russian military incursions into Ukraine, President Obama said: “I consider the actions that we’ve seen in the last week a continuation of what’s been taking place for months now. The separatists are backed, trained, armed, and financed by Russia. Throughout this process, we’ve seen deep Russian involvement in everything that they’ve done.”