Russia accused of ‘blackmail’ after stopping gas supplies to two European countries

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Poland’s state oil and gas company PGNiG said Russian gas giant Gazprom had informed it on Tuesday that it would halt gas deliveries through the Yamal pipeline on Wednesday morning.

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Russia’s gas supplies to Eastern Europe look very uncertain after state-run gas giant Gazprom told Poland and Bulgaria it would halt supplies.

The move comes after both countries rejected Moscow’s recent demand to pay for gas supplies in rubles, but also coincides with a sharp rise in tensions between Western allies and Russia as the war in Ukraine is already going on for a third month.

Early Wednesday morning, Gazprom released a statement saying it had halted supplies to both Poland and Bulgaria — both major consumers of Russian gas — because payments were not made in Russian currency. It said deliveries would resume once these payments are made.

In the statement, Gazprom warned both countries against any “unauthorized withdrawal” of gas supplies flowing through their territories.

“Bulgaria and Poland are transit states. In case of unauthorized extraction of Russian gas from transit volumes to third countries, the stocks for transit will be reduced by this volume.”

Forewarned

Poland’s state-owned oil and gas company PGNiG said Gazprom had informed it on Tuesday that it would stop deliveries to the country via the Yamal pipeline from Wednesday morning.

But after dropping to zero earlier Wednesday, physical gas supplies appeared to be picking up again, data from the European Union’s network of gas carriers shows, according to Reuters. However, Poland said deliveries had indeed been halted.

Bulgaria has not confirmed that its supplies have been cut, but its Prime Minister, Kiril Petkov, described the move as “blackmail” and said any cut off of supplies would be a breach of contract. Bulgarian Energy Minister Alexander Nikolov said delivery to customers was guaranteed for at least a month in advance, Reuters reported.

Other business leaders and government officials have rejected Russia’s move.

British Deputy Prime Minister Dominic Raab said the move would contribute to Russia’s status as an “economic pariah”, while Deutsche Bank chief financial officer James von Moltke told CNBC on Wednesday it was a “worrying sign” and that while it won’t have an immediate economic impact, “it remains a risk to the overall outlook.”

Even before the invasion of Ukraine, gas supplies had become a point of tension between Russia and its European neighbors, with the Kremlin being accused of using energy supplies, with any restrictions having a dramatic impact on market prices, as a geopolitical weapon.

Russia vehemently denied this, with Russian President Vladimir Putin calling the allegations “blather” and saying the US contributed to a global energy crisis last fall.

But Russia’s latest toy with its European energy customers comes ostensibly after its demand to pay in rubles for its gas was largely rejected by importers in the region, including Poland and Bulgaria. They said the demand is a breach of contract, while analysts said the move was a way for Russia to try to raise the ruble as international sanctions, over the unprovoked invasion of Ukraine, hit its economy and currency.

Situation being tracked

In the meantime, gas supplies in Eastern Europe appear to be in flux and under threat as Western support for Ukraine – and pressure on Russia – only increases.

Polish gas company PGNiG said in a statement on Tuesday that the company is monitoring the situation “and is prepared for various scenarios” and wants to receive gas from other sources. However, the country currently has sufficient gas in storage and is meeting demand, the report says.

Bulgaria imported nearly 73% of its natural gas from Russia in 2020, EU data shows, while Poland imported about 45% of its natural gas from Russia in the same year, just above the EU-wide average of around 40%. significant dependence on Russian gas imports.

Moscow’s invasion of Ukraine has prompted the EU to expedite imports of Russian energy and has resulted in the shutdown of the already controversial Nord Stream 2 gas pipeline between Russia and Germany, another country heavily dependent on Russian gas.

Not all countries have rejected Russia’s demand to pay for gas in rubles.

Hungary — whose strong leader Viktor Orban has more friendly ties with President Vladimir Putin — has broken ranks with its EU partners by agreeing to pay for Russian gas in rubles.

The foreign minister said on Wednesday that the country receives Russian gas under its contract with Gazprom through Bulgaria and Serbia.

“I want to assure everyone that the failure to deliver gas shipments to Bulgaria does not mean that transit shipments through Bulgaria will be stopped,” Foreign Minister Peter Szijjarto said on his Facebook page in comments translated by Reuters.

He said Hungary’s next payment obligation for Russian gas is due in mid-May, and the country will transfer its payment in euros to Gazprombank, where the amount will be converted into rubles.



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