Poland, Bulgaria Cut Off from Russian Gas- Won’t Pay in Rubles

Gas prices are spiking across Europe on the news of Russia turning off pipelines to Poland and Bulgaria. Russia demanded that gas payments be fulfilled in Rubles to serve as a lifeline for the struggling currency. European nations are refusing to comply. That means Russia won’t get paid if they provide gas.

The Wall Street Journal reports:

Russian energy giant Gazprom PJSC said on Wednesday that it had stopped supplies to Bulgaria and Poland “due to nonpayment in rubles.” Bulgaria and Poland said the move was a breach of contracts. Other large European gas consumers like Germany and Italy haven’t been affected so far.

Analysts at energy consulting firm Rystad said that “Russia has fired the first shot back at the West,” wielding energy as a weapon.

The EU Commission president described the move as “unjustified and unacceptable,” adding that it highlighted the “unreliability of Russia as a gas supplier.”

“The announcement by Gazprom that it is unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail,” she stated.

The supply of gas will resume only when the two nations comply with Russia’s new payment scheme, Gazprom said. They warned Sofia and Warsaw against trying to siphon off Russian transit gas intended for other countries.

OTHER COUNTRIES WILL BE CUT OFF

Other countries may be cut off from Russian gas supplies should they fail to switch to the ruble payment scheme, Peskov warned. To avoid this, they need to open accounts at Gazprombank. They then need to make payments in euros or dollars that would then be converted into rubles.

The European Union vowed on Wednesday to continue to phase out purchases of Russian gas. They plan to speed up the switch to renewable energy in response to Russia halting gas flows to Poland and Bulgaria.

Several importers have signaled their readiness to accept the Moscow-proposed scheme. On Monday Uniper, Germany’s largest buyer of Russian gas said it would be possible to pay for future supplies in rubles without breaching Western sanctions.

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