Russia`s bitter dispute with Ukraine over natural gas supplies has had a serious spillover effect in Europe and has drawn a reprimand from Washington, which warned against attempts to use energy supplies as a political weapon. Urged by the U.S. and European governments to compromise, Russia`s state-owned monopoly Gazprom said late Monday it would increase the amount of gas heading for markets in eastern Europe, where some supplies have been affected by the row with Ukraine. On Sunday, Gazprom cut off the supply of gas to Ukraine after the former Soviet republic rejected a more than four-fold price increase. The decision to cut supplies to its neighbor and former ally in mid-winter came on the day Russia assumed the rotating presidency of the G-8 group of industrialized countries. Raising questions about Russia`s reliability as a political and economic partner, the move sent shock waves across Europe, which gets between a quarter and one-fifth of its gas from Russia. Ukraine is not only a consumer of Russian gas but also a conduit for 80 percent of Russia`s supplies to the European Union. While Russia stopped providing the gas to Ukraine, it continued to send it westward via pipelines crossing Ukrainian territory. But responding to the cut-off, Ukraine allegedly diverted some of the gas destined for Europe, and several countries on Monday reported shortfalls and flagging pressure in pipelined supplies. Like other countries that were constituent parts of the former Soviet Union, Ukraine has long received energy from Russia at preferential rates. The Russia-Ukraine dispute has been going on for years, but it came to a head when Gazprom, citing the need and the right to charge a market price, hiked the price charged to Ukraine from $50 per 1,000 cubic meters to $230, effective from Jan. 1. Ukraine said increases in gas prices were acceptable but should be phased in gradually. Gazprom`s moves are widely seen as an attempt to put political pressure on Ukraine, which has fallen out of favor with Moscow. Although the gas giant refers to market prices, Russia still charges much lower, heavily-subsidized rates to countries whose relations remain friendly, such as Belarus. The Kremlin`s ties with Ukraine have been strained since the ”Orange Revolution” which brought Yushchenko to power rather than a Russian-backed rival accused of trying to rig a 2004 presidential election, Viktor Yanukovich. Yuschenko has sought to move Ukraine away from Moscow`s influence and closer to the E.U. and NATO. The dispute over gas prices has simmered for years, and the particular timing of Gazprom`s move -- three months before Yushchenko faces a difficult parliamentary election -- has fueled suspicions that it is politically motivated. Political analysts say severe increases in the price of gas will likely push Ukrainian voters to supporting Yushchenko`s opponents at the polls in March, with Yanukovich benefiting the most.