OGZPY PJSC Gazprom (PK)

Russia and Ukraine escalated economic and political feuding on Wednesday as Kiev said it would close its airspace to Russian airlines and halt gas purchases from Russia, while the Kremlin accused Ukraine's government of "silent consent" to a power outage in the disputed Crimea region.

The conflict between the neighbors is coming back into focus just as Moscow is facing fresh challenges over its intervention in Syria, after Turkey downed a Russian warplane on Tuesday.

Both sides have hardened their rhetoric since Sunday, when pro-Ukrainian activists blew up pylons supporting power lines that supplied Crimea, the Black Sea peninsula area of two million people annexed by Moscow in 2014, with most of its electricity.

Ukrainian Prime Minister Arseniy Yatsenyuk, speaking at a government meeting Wednesday, ordered a ban on all Russian-owned airlines transiting Ukrainian airspace, saying that "Russia could use Ukrainian airspace for provocations." Both countries this fall banned each other's airlines from landing at their airports.

Mr. Yatsenyuk also ordered Naftogaz, the country's state energy company, to immediately halt imports from Russia. The company had previously announced that it was reducing Russian imports and would likely be able to make it through the winter with reverse flows from Europe only.

Russian state gas company PAO Gazprom said it had halted to deliveries to Ukraine as Kiev hadn't made any prepayments for gas. Gazprom noted concerns that gas volumes in Ukrainian storage, needed to keep Russian gas flowing to Europe this winter, were low. Ukraine says it has enough gas and the European Commission said it had "no particular concerns about the gas flows from Russia to Ukraine."

In Russia, President Vladimir Putin accused Kiev of "silent consent" to the power outage. He ordered officials to ensure that the peninsula had temporary energy supplies before construction of part of an undersea cable from mainland Russia is completed on Dec. 20.

According to Russia's Energy Ministry, 1.3 million people were still without power on Wednesday.

In Crimea, authorities have canceled school for the week and asked employers Wednesday to give working mothers paid leave to stay at home with their children.

Ukraine's Interior Ministry has opened a criminal investigation into the explosions, though it hasn't identified suspects. Pro-Ukrainian activists, many of them from the Muslim minority community of Crimean Tatars, have been staked out along the border with Crimea since September to block cargo from entering the annexed territory.

After days of blocking repair workers from reaching the sites, the activists agreed Tuesday to allow work to begin on one of four downed pylons, according to Ukraine's national grid operator Ukrenergo.

But it was unclear Wednesday whether the activists would allow the remaining pylons to go back up.

Mustafa Djemilev, the leader of the Crimean Tatars' unofficial ruling body, said on Wednesday that humanitarian concerns had pushed the activists to agree to allow repair works to start, because "the vast majority of people (in Crimea) are without electricity."

"The fate of the second (power) line will be decided," said Mr. Djemilev. "The existing agreement about delivering energy (to Crimea) does not correspond to Ukraine's interests and has to be re-examined."

The Ukrainian government escalated its confrontation with Russia over the Crimea peninsula following the outage by banning cargo trucks from entering the disputed region, an apparent concession to the activists.

Gabriele Steinhauser in Brussels contributed to this article.

Write to Laura Mills at laura.mills@wsj.com and Andrey Ostroukh at andrey.ostroukh@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 25, 2015 08:35 ET (13:35 GMT)

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