While both Poland and Bulgaria have received enough natural gas from other EU countries to keep the lights on for now, it’s not clear how the bloc would deal with additional shutdowns, especially if Russia stopped supplying major customer Germany.
Successive shutdowns could cause major European economies to struggle to find new suppliers and push energy prices up around the world.
On Wednesday, EU officials said Russia’s actions amounted to “blackmail”.
“Gazprom’s announcement that it will unilaterally stop supplying gas to customers in Europe is yet another attempt by Russia to use gas as a blackmail tool,” European Commission President Ursula von der Leyen said in a statement. “This is unjust and unacceptable.”
This was the first supply interruption since Russian President Vladimir Putin first threatened that ‘unfriendly countries’ would have to pay for natural gas in rubles – a requirement designed to help the Russian economy, but also put EU countries under pressure to break ranks and violate the bloc’s sanctions regime.
Kremlin spokesman Dmitry Peskov on Wednesday dismissed charges of blackmail and said Russia remained a reliable partner even as he warned of more lockdowns.
In a statement released Wednesday, Gazprom said it had stopped supplying natural gas to Poland’s PGNiG gas company and Bulgaria’s Bulgargaz for failing to comply with an order to pay in Russian currency. The suspension would remain in place from Wednesday and will last “until payments are made” in rubles, Gazprom said.
The shutdown also comes a day after Berlin signaled it could potentially back an EU embargo on Russian oil if Poland could help close Germany’s oil supply gap.
The EU is trying to phase out Russian energy while a coal embargo is already in place. But the oil embargo is still under discussion. And gas dependence is an even more thorny issue.
On Wednesday, European officials tried to reassure citizens that immediate consequences had been contained. “There will be no shortage of gas in Polish homes,” Poland’s climate minister Anna Moskwa said on Twitter. The Bulgarian government promised that there would be no domestic consumption restrictions.
At a press conference in Brussels, von der Leyen confirmed that both Poland and Bulgaria sourced gas from other EU countries. The bloc has made “contingency plans” for budget cuts, she said, and officials will meet soon to discuss additional measures.
It was not immediately clear whether and how the shutdown would affect gas flowing through Poland and Bulgaria to other EU countries. Gazprom said that if PGNiG or Bulgargaz were to transfer gas destined for third countries, stocks for those countries would be “reduced”.
Finding alternative suppliers would be much more difficult if Russia expanded the number of major countries it shuts down.
A similar shutdown cannot be ruled out for Germany, Economy Minister Robert Habeck said on Wednesday, warning he would expect such a move to trigger a recession in Europe’s largest economy.
“I take this very seriously,” he said, adding that it shows Russia is pursuing its threats. But it’s important not to succumb to “blackmail,” he said.
Germany has tried to diversify its gas supplies but still depends on Russia for 35 percent of its imports.
“The situation has been tense for months,” Habeck said. “But payments will continue to be made in euros.”
The Ministry of Economic Affairs on Wednesday cut its growth forecast for the year to 2.2 percent, from the 3.6 percent it had forecast at the start of the year. Those numbers don’t appear in a gas embargo or Russia blocking supplies, Habeck said.
“If we add that to the calculations, we would see an economic recession,” he said.
The question of when and how to divest Europe of Russia’s fossil fuels continues to divide the Baltic states from the EU, and some Central European countries have called for a total embargo. Others, notably Germany, have resisted, saying they need more time to build alternative stocks.
The prospect of Russia pulling the plug could give a boost to EU deals closing.
Russia’s latest steps will only accelerate the EU’s goal of “phasing out” Russian energy, Eduard Heger, Prime Minister of Slovakia, tweeted Wednesday. Norbert Röttgen, a legislator of the center-right Christian Democratic Union in Germany, said an oil and gas embargo is now a matter of “EU solidarity”.
Top EU officials have suggested that sanctions on oil are only a matter of time.
During a visit to Warsaw on Tuesday, Habeck said Berlin was days away from closing a deal that could allow it to find an alternative to the 12 percent of the country’s oil that still comes from Russia.
The potential agreement between Germany and Poland secures the supply of Germany’s Schwedt refinery, operated by Russian state energy giant Rosneft, from Poland’s Plock pipeline.
Jens Suedekum, a professor of international economics at the Düsseldorf Institute for Competition Economics and adviser and adviser to the German government, said the timing of Poland’s Moscow lockdown points to possible retaliation for the deal.
“Putin’s decision to cut Poland off from gas was in fact revenge against the Plock pipeline agreement,” Suedekum tweeted.
Russia remains the main supplier of oil, natural gas and solid fossil fuels, such as coal, and Zelensky has urged the European Union to cancel its “blood money” payments for energy from Moscow.
Ukrainian officials were quick to criticize Gazprom’s decision, saying the move was in retaliation against the EU for its staunch support of Kiev – especially Poland, which has been particularly vocal in its support and has been a center for weapons and supplies that poured into Ukraine.
“Russia is trying to break the unity of our allies,” said Andriy Yermak, the chief of staff to Ukrainian President Volodymyr Zelensky. “That is why the EU must be united and impose an embargo on energy resources, depriving the Russians of their energy weapons.”
EU presents plan to cut Russian gas imports by two-thirds this year, ends boycott
Officials and experts have long worried the EU is too dependent on Moscow and have warned that the relationship could be weaponized. The two countries targeted on Tuesday are particularly vulnerable: Poland gets more than 45 percent of its natural gas from Russia and Bulgaria produces more than 70 percent, according to EU data.
The EU pledged last month to phase out Russia’s fossil fuels by 2030, starting by cutting gas imports by two-thirds by the end of this year.
On Tuesday, some analysts said Gazprom’s move could hasten the severing of ties. Fatih Birol, executive director of the International Energy Agency, called it “another sign of Russia’s politicization of existing agreements”, and predicted it would “only accelerate European efforts to move away from Russia’s energy supply”.
Morris reported from Berlin, Thebault from Washington and Pietsch from Seoul. Frederik Seeler in Berlin, Quentin Aries in Brussels and Annabelle Chapman in London contributed to this report.