Russian energy giant Gazprom halted gas supplies to Poland and Bulgaria over their failure to pay for gas in rubles, the state-owned company announced on Wednesday, as the Kremlin retaliates against Western sanctions imposed over its invasion of Ukraine. Putin has demanded countries pay for Russian gas—a major export—in rubles as a means of offsetting the impact of Western economic sanctions and propping up the currency. While the technicalities of Putin’s order mean buyers can continue to make payments in the currency specified in their contracts—most in Europe are in euros or dollars—the European Union warned the mechanism risked breaching EU sanctions against Moscow and a host of European countries refused to comply. Poland and Bulgaria are the first countries to be cut off for refusing to pay in rubles. The bloc, including Bulgaria and Poland, relies heavily on Russia for its energy, accounting for around 46% and 90% of gas in Poland and Bulgaria, respectively, according to the Polish think tank Forum Energii and Politico.20%. Futures contracts tracking wholesale gas prices in Europe jumped around a fifth in early trading on Wednesday following Gazprom’s announcement, according to the Financial Times.“It is clear that at the moment…natural gas is being used more as a political and economic weapon in the current war," Nikolov said, according to Reuters. Europe’s response. European Union President Ursula von der Leyen tweeted that Gazprom’s announcement “is another attempt by Russia to blackmail” the bloc with gas. She said they are “prepared for this scenario” and “mapping out” a coordinated response. Russia Threatens To Cut Off Gas To Poland After Country Declines To Pay In Rubles (Forbes)Putin Plans To Make ‘Unfriendly’ Countries Purchase Russian Gas In Rubles (Forbes)Brussels warns EU countries that ruble gas payments may breach sanctions (Politico)
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