Although some of the settlement's details are unclear, it seems Moscow has given up more than Kiev. Gazprom, the Russian gas giant, says Ukraine will pay $230 per 1,000 cubic metres for Russian gas - exactly as Gazprom demanded and a huge increase on the current $50. Ukraine argues that its average price will be only $95 per 1,000 cubic metres because expensive Russian gas will account for only about one-quarter of supplies. Gazprom will pipe the rest from central Asia at just $50 per 1,000 cubic metres.

This settlement cleverly gives both sides scope to claim commercial victory. But in political terms, Moscow has been left with egg on its face. It was Russia that raised the stakes during the row, for example televising live the moment when Gazprom cut Ukraine's supply. Russian president Vladimir Putin clearly intended to humiliate Kiev - and punish Ukrainian president Viktor Yushchenko for the Orange revolution.

In the event, Kiev has escaped humiliation and Moscow has been left in the awkward position of explaining its actions to the world. Its reputation as a reliable energy supplier has been called into question. Ukraine bears some of the blame for extracting gas for its own use from supplies destined for Gazprom's European Union customers. But, to Mr Putin's embarrassment, international concern has rightly focused not on Kiev, but Moscow.

Russia has also failed in its long-term aim of securing a stake in Ukraine's export pipeline. In Georgia and Belarus it has recently struck deals swapping cheap gas for a say in pipeline management. Not for the first time, Kiev has escaped Moscow's clutches.

However, Ukraine must now adapt to rising gas prices. Increased energy efficiency will bring political as well as economic benefits. The sooner Kiev acts, the quicker it will reduce the scope for Russian political leverage.

The deal highlights the vital role of pipelines. Gazprom has, in effect, protected its commercial interests, and satisfied Ukraine's, by squeezing Kazakhstan and Turkmenistan. No wonder the central Asian states are considering new Gazprom-free export routes. It is unclear if they have enough gas to justify the huge costs. But the US and the EU must monitor these ideas. If they become commercially viable, they could merit political support.

Finally, despite Gazprom's recent efforts to improve transparency, the group has granted a key role in this deal to Rosukrenergo, an obscure joint venture which was investigated last year by the Ukrainian authorities for alleged links to organised crime. Rosukrenergo denies wrongdoing. But such a company, with undisclosed ultimate owners, should have no place in a high-profile international deal.