Moscow has reduced gas supplies to Ukraine after Kiev failed to pay off at least part of its gas debt before a 0600GMT deadline on Monday.
Russian state-energy giant Gazprom announced that Ukraine will only receive the gas that it has paid for in advance, in a move that could threatened gas deliveries to the European Union.
"They've paid zero. Correspondingly we deliver zero," said Gazprom spokesman Sergey Kupriyanov on Monday, as reported by Russian state media.
Ukraine's energy minister confirmed that gas supplies had been cut.
"We have an announcement to make today - that gas supplies to Ukraine have been reduced to zero," Yuri Prodan told a press conference.
Meanwhile, Ukraine's Prime Minister implied that the cut was politically motivated.
"But it is not about gas. It is a general Russian plan to destroy Ukraine," Arseny Yatseniuk told reporters.
Both Gazprom and Naftogaz, the Ukrainian state-energy firm, have filed suits at the Arbitration Institute of the Stockholm Chamber of Commerce (SCC.)
Ukraine has around 14bn billion cubic metres of gas in underground storage, according to the head of state gas company Naftogaz.
Ukraine's Prime Minister Arseny Yatseniuk blamed the breakdown of talks on the Russian side, saying that Moscow wanted to cause Ukraine supply problems during the winter months.
Ukrainian and Russian leaders held talks over night but failed to reach a deal in the gas price dispute.
The reduction in supplies to Ukraine could lead to disruption in gas deliveries to the European Union, which relies on Russia for a third of its gas needs, around half of which is transported via Ukraine.
"Volumes of gas for European customers will be fully met in compliance with their contracts. Naftogaz must ensure transportation to the delivery points," Kupriyanov said.
Russia has previously cut off gas deliveries to Ukraine twice, in the winters of 2006 and 2009, over a gas price dispute.