The Russian government has halted all gas exports to Poland and Bulgaria after, they say, a deadline passed for the nations to pay for gas in Russian roubles rather than western currency.
Sources with the Polish government and the Polish Oil and Gas Industry (PGNiG) claimed that Russia has halted all gas supplies to the country Tuesday night, with the stoppage of transmission confirmed Wednesday morning amid a war of words between Moscow and European capitals.
Wholesale gas prices soared a fifth in Europe on the news, communicating both the shortages the reduction of imports resemble, as well as market uncertainty. Several European nations are heavily dependent on Russian gas, notably Germany.
The European Union has called the suspension of gas deliveries “blackmail”.
According to a report from Onet, speculation had arisen Tuesday over whether the total shutoff was triggered by a prior deadline set for last Friday by the Russian government for Poland and other European nations to pay for gas in roubles, rather than in Euros or dollars, a policy Russian President Vladimir Putin had vowed for “unfriendly” countries back in March.
Russian state media agency TASS confirmed this state of affairs Wednesday morning, quoting state gas company Gazprom, which said: “Gazprom Export has notified [Bulgaria and Poland] of the suspension of gas supplies from April 27 until the payments are made according to the procedure outlined in the Decree.”
Poland, along with several other European countries like Germany, has rejected the Russian demand to pay for gas and other commodities in roubles, while Hungary, another European Union member state, has claimed it will pay in roubles if asked.
The TASS statement noted that not all shipments travelling to Poland had been suspended, only those being delivered to Poland itself. Gas pipelines also travel through Poland to deliver Russian energy to central Europe — Germany in particular — and Gazprom said they were not being turned off. If Poland attempted to siphon off that transiting gas heading to central Europe for their own use, however, the statement warned they would be turned off as well.
Russian gas is also still flowing into Europe through the Nordstream One pipeline, which goes directly from Russia to Germany under the Baltic sea.
Prices of gas jumped significantly on the reports that Russia has cut off supplies, with European gas prices surging by 17 per cent on Tuesday night as commodities traders were assessing the risks of other countries being cut off from Russian gas. By early trading Wednesday, prices were up 20 per cent, to levels the Financial Times said was a price a level roughly seven-times-higher than this time last year.
Criticising Russia for the move, European Commission President Ursula von der Leyen said Russia was attempting to blackmail the bloc. She said: “unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail.
“This is unjustified and unacceptable. And it shows once again the unreliability of Russia as a gas supplier.”
The EU chief said the bloc was “prepared for this scenario” and has “put in place contingency plans” while looking for alternative sources of gas.
The Polish government also commented on Tuesday, asserting that it had enough fuel in storage to meet its energy needs. Poland’s gas network has said Russia’s move is a breach of contract and is considering legal action against Gazprom, reports Polish newspaper Rzeczpospolita.
The report further noted that this is not the first time Russia has cut Poland off from gas supplies as a punishment, claiming seven suspensions lasting from a few days to six months over the past 18 years. A notable period of such cuts was during the last Russian invasion of Ukraine in 2014.
Earlier this month, some European politicians suggested that the EU halt all Russian gas imports, following accusations that Russian troops in Ukraine had committed war crimes by massacring civilians in the Kyiv suburb of Bucha.
Prime Minister Ingrida Šimonytė of Lithuania backed an EU embargo and announced her country would be halting all Russian gas imports.
Germany, the largest importer of Russian gas in Europe, has been the most hesitant to back any halting of gas supplies, with some suggesting the German economy could face a major recession if supplies were cut off.