Gazprom to suspend Russia’s gas supplies through Bulgaria as of Wednesday

Russian state-owned gas supplier Gazprom is to halt supplies going through Bulgaria and Poland into Europe as of Wednesday 27 April, Bloomberg reported on Tuesday, citing the Bulgarian Energy Ministry. This is a remarkable and major escalation in the standoff between Moscow and European nations over energy supplies and the war in Ukraine.

The report comes after Gazprom earlier notified Poland’s gas supplier PGNIG that it would be halting gas supplies as of 0800CET on Wednesday.

The major escalation in the fight between Moscow and Europe over crucial energy supplies comes against the backdrop of a standoff between the two sides over Russian demands for gas payments to be made in Russian roubles or gold which is widely rejected by European leaders who allegedly see Moscow in a breach of natural gas future delivery contracts.

Moscow appears to be making good on a threat to halt gas supplies to countries that refuse President Vladimir Putin’s new demand to pay for the crucial fuel in rubles. Europe has said that doing so would breach sanctions and strengthen Russia’s hand.

As payment deadlines start falling due, Poland, followed swiftly by Bulgaria, said on Tuesday that Gazprom PJSC had informed them the gas will stop flowing on Wednesday. In the coming weeks, more companies will have to decide whether to pay in rubles — or risk losing supplies.

European gas prices surged as much as 17% as traders calculated the risk of other European countries being hit next. The focus now turns to other European capitals, particularly Germany, which is heavily dependent on Russian gas. There was no immediate reaction from Berlin. Any buyer rejecting the new payment procedure out of hand is running a very real risk of supplies being cut.