**3. Summary on Hold-Up Occurrences**

*3.1. Classification of Hold-Up Occurrences*

In this section, we categorise the supply disruptions described above. The following categories emerge. (1) Non-payment of debts by the importers. This often led to the interruption of gas supplies and was most common in the 1990s after the break-up of the USSR. (2) Technical faults leading to supply disruptions. This might have been used to cover opportunistic behaviour. (3) Political changes (most notably, a change in the government or domestic orientation of a resource policy) that led to the non-fulfilment of existing agreements. (4) Demands for higher gas export prices, often based on significant changes in market conditions. In some cases, the exporters resort to supply disruptions. (5) Demands for a higher transit fee. This can also lead to supply disruption. (6) Theft of gas in transit. This can lead to supply disruption.

The first two categories listed above (debts and technical faults) are different from the rest in that they often are not due to opportunistic behaviour or hold-up. The latter two categories (transit fee and theft of gas) are special in that they are done by a transit country. The Table 1 below allocates the supply disruptions hold-ups into six categories.


**Table 1.** Summary of disruptions.


**Table 1.** *Cont.*

Figure 1 below shows the evolution of hold-up types, indicating greater diversity of reasons for supply disruptions, which attracted more attention to supply security indicators [52]. Before 2000, supply disruptions occurred mostly due to price demands and non-payment of debt. Most of the price demands were made by Algeria in the 1980s and by Turkmenistan in the 1990s. Most of the debt-related disruptions took place in the early 1990s, soon after the collapse of the Soviet Union. Many of the newly-emerged economies were too weak to pay for energy imports with hard currency. Supply disruptions related to transit countries—transit fee demands and theft of gas—occurred infrequently before 2000.

**Figure 1.** Classification of hold-up occurrences.

Since 2000, all six types of hold-ups took place. The most common cause for supply disruptions were price demands. The second most common cause for supply disruptions was political change. Price demands were made by Indonesia in the early 2000s and by Russia and Turkmenistan throughout the 2000s. Political changes led to supply disruptions in Indonesia and Russia as well as Ukraine throughout the 2000s. Hence, designing supply contracts that minimise the likelihood of a price dispute, even in case of some political changes, is crucial.

The importance of studying this evolution is emphasised by growing international integration, growing global demand for natural gas to reduce emissions, and growing costs of natural gas investments that increases hold-up potential. Since 2000, supply disruptions related to transit countries—transit fee demands and theft of gas—became more frequent and often complicated the situations around the hold-up. Disruptions related to transit countries are jointly the second most common after price demands since 2000. Hence, arrangements that minimise the likelihood of a dispute with transit countries are also crucial.

The hold-up problem is especially important in the multi-lateral framework, where transit countries are involved. Theoretically, the involvement of a transit country complicates the natural gas trade and increase hold-up potential. Empirical data seems to align with this theoretical notion: the evolution of supply disruptions emphasises the recent importance of transit countries, as disruptions related to transit countries have become more frequent since the year 2000. However, the literature does not contain a considerable discussion of hold-up problems due to a third party. This paper is an early step towards exploring supply disruptions related to transit countries.
