Gazprom, Russia’s state-owned gas company, said Wednesday that it has cut off the supply 0f natural gas to Poland and Bulgaria. This move will almost certainly escalate economic tensions between Moscow and the West over the war in Ukraine.
A Gazprom employee operates a well in Siberia. They have recently cut off the natural gas supply to Poland and Bulgaria. Image Credit: Andrey Rudakov/Bloomberg News
Russia announced in a statement yesterday that it shut off the gas supply to Bulgaria’s Bulgargaz and Poland’s PGNiG because they defied President Putin’s mandate that they pay for their product in Russian currency.
A representative from Gasprom informs us that this suspension of services will last “until payments are made in rubles.”
PGNiG, one of the largest companies in Poland, has confirmed the stoppage noting that natural gas deliveries from Gazprom have “halted completely.” However, they continued to say that at the moment, the move has not affected current deliveries to their customers and that they are receiving fuel “as they wished.”
More than 40% of Europe’s natural gas supplies come from Russia, giving it a near stranglehold on the economies of Europe. The gas flows from pipelines leading out of Russia that crisscross the continent, reaching as far as Spain and Portugal.
These pipelines flow through Poland and Bulgaria (both NATO and EU members), and both countries could retaliate by stopping the flow of Russian gas to other countries in Europe. They could also obtain gas from Turkey and even Ukraine, a major energy exporter, with two major Russian pipelines running through the country that Ukrainian gas is fed into.
The flow of gas through Europe and the fees charged by countries for the gas to flow through these pipelines was the primary reason Putin built Nord Stream 1 and began work on Nord Stream 2. This underwater pipeline bypassed all European states and ended in Germany, saving Putin billions in transit fees over its lifetime of use while increasing Europe’s dependence on Russian supplies of energy.
This is the first supply disruption since Putin said “unfriendly countries” would have to pay for natural gas in rubles instead of other currencies. European leaders had rejected Putin’s demand and accused Gazprom of violating its contracts.
The EU relies heavily on Russian natural gas, which citizens use to heat homes, cook meals, and generate electricity for a majority of their 27 member states. For many years government officials and industry experts have been concerned that the EU is too dependent on Moscow for this fuel, and the relationship could be weaponized.
Poland and Bulgaria are particularly vulnerable: Poland gets more than 45 percent of its natural gas from Russia, and Bulgaria more than 70 percent.
Poland’s climate minister, Ana Moskwa, has said in a public announcement, “There will be no shortage of gas in Polish homes.” They have access to their strategic reserves, which they say are 80% full, and have opportunities to purchase natural gas from other members of the European Union.
The government of Bulgaria has said that they, too, have secured alternate natural gas supplies, and Putin’s action will result in no domestic restrictions on consumption.
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