Russia halts gas supplies to Poland and Bulgaria

Russia has cut off gas supplies to Poland and Bulgaria, causing European energy prices to spark.

In a statement, state-control energy giant Gazprom – which supplies around 40% of European gas – said it had suspended supplies after both nations refused to pay in roubles. Prices for natural gas futures rose by around 20% in response in early trading.

Russia first announced in March that it would require roubles payments from so-called “unfriendly countries” after financial sanctions caused the currency to slump.

A number of European buyers refused, however, arguing that it contradicted contract terms and could be used to bypass sanctions.

Ursula von der Leyen, European Commission president, said Russia wanted to use gas as an “instrument of blackmail”, and called the move “unjustified and unacceptable”. She added: “It shows once again the unreliability of Russia as a gas supplier.”

Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown, said: “Energy is being increasingly weaponised as the war in Ukraine looks to set to enter the long haul and expectations grow that a crude oil embargo will end up being slapped on Russia by the European Union.

“If Russia’s customers continue to refuse to sign contracts in roubles, and accelerate efforts to find other sources of energy as they pledged to do, these revenue streams risk turning into a trickle, putting fresh pressure on the rouble.”

Russ Mould, investment director at AJ Bell, said: “This action has put renewed upward pressure on oil and gas prices and offers a reminder that the impact of the path Russia has chosen over the last two months or so will continue to unpredictable.

“Today’s news will only incentivise others to accelerate their efforts to wean themselves off Russian gas and oil imports.”