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April 27, 2022

Russia has halted gas supplies to Poland because the country had refused Russia’s demand to pay for gas supplies in rubles.

Russia’s state gas giant Gazprom had said Bulgaria — which also refused to pay in the Russian currency — would also face a cut, but it’s unclear whether its supplies have been affected yet.

Tensions are ratcheting up between Western allies and Russia after Foreign Minister Sergey Lavrov on Monday said the threat of a nuclear war is very significant and the risks should not be underestimated.

U.S. Defense Secretary Lloyd Austin, who visited Kyiv last weekend, responded to those comments Tuesday, calling the nuclear war rhetoric “very dangerous and unhelpful.” 
The U.S. also said it plans to send diplomats back to Ukraine as Russia focuses its assault on the eastern and southern parts of the country.

Development on Wednesday: No Rubles, No Gas

Russia’s gas supplies to Poland and Bulgaria look uncertain on Wednesday morning after the countries refused Moscow’s demand to pay for gas supplies in rubles.

Russia’s state gas giant Gazprom had contacted Poland and Bulgaria’s state gas companies on Tuesday telling them that their supplies would be halted on Wednesday morning. It’s unclear whether its supplies have been affected yet; Poland said supplies had been cut but European operator data reported by Reuters showed some supplies had resumed this morning. It’s unclear what the situation in Bulgaria is right now.

Poland’s state-owned oil and gas company PGNiG said Russia’s gas giant Gazprom had informed it on Tuesday that it would halt gas supplies that are delivered via the Yamal pipeline on Wednesday morning.

PGNiG said in a statement Tuesday that the company is monitoring the situation “and is prepared for various scenarios” and to receive gas from other sources, but said that currently it has enough gas in storage and is meeting demand.

The halting of gas supplies to Poland, which imports around 45% of its natural gas from Russia, according to recent data from the EU, is another sign of rising tensions between Russia and the West following the invasion of Ukraine. One official in Kyiv described Russia’s latest move to cut supplies as “gas blackmail.”

Gazprom had also informed Bulgarian state gas company Bulgargaz that it would halt gas supplies as of Wednesday, the Energy Ministry said on Tuesday, although it’s uncertain whether the supplies have been cut. Bulgaria imported almost 73% of its natural gas from Russia in 2020, EU data shows.

Russia had demanded that countries importing its gas (the EU as a bloc imports around 40% of its natural gas from Russia every year) must pay in rubles, prompting a backlash from importers, including Poland and Bulgaria, which refused and said the demand is a breach of contract.