The European Union is working to ensure alternative gas supply and pledges a coordinated response to Gazprom’s announcement it had stopped gas flows to Poland and Bulgaria, European Commission President Ursula von der Leyen said on Wednesday.
Late on Tuesday, Poland and Bulgaria said they had been notified by Gazprom that Russian gas supply to the two countries would be cut off as of Wednesday. Gazprom says supply was stopped “due to absence of payments in rubles.”
Commenting on the halt of Russian gas deliveries to certain EU member states, von der Leyen said on Wednesday: “The announcement by Gazprom that it is unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail.”
“This is unjustified and unacceptable. And it shows once again the unreliability of Russia as a gas supplier,” the EC president added.
“We are mapping out our coordinated EU response,” von der Leyen said.
“Europeans can trust that we stand united and in full solidarity with the Member States impacted in the face of this new challenge,” she noted.
Charles Michel, President of the European Council, said he is in contact with the prime ministers of Poland and Bulgaria, and that “We will remain united and support each other while phasing out Russian energy imports.”
Polish Prime Minister Mateusz Morawiecki described the halt of Russian supply as “a direct attack" on Poland and vowed that the country would not give in to “this blackmail.”
In the contract with Gazprom, Bulgaria has to pay in U.S. dollars for Russian gas and Russia’s demand for payment in rubles is a breach of contract and contains risks for the buyer, Bulgarian Energy Minister Alexander Nikolov said on Wednesday.
“It is clear that in the current war in Ukraine, Russia uses natural gas as a political and economic weapon,” Nikolov added, noting that Bulgaria will not negotiate under pressure.
There is no risk of gas rationing in Bulgaria right now, the government said. Bulgarian Prime Minister Kiril Petkov said on Wednesday he had discussed the situation with his Greek counterpart Kyriakos Mitsotakis in a phone call and that Bulgaria and Greece would continue to work together for energy security and diversification, which is of strategic importance for both countries and the region.
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By Tsvetana Paraskova for Oilprice.com
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Or not.
Got it.
Sounds like their War for all of them absolutely.
Move along.
Gas delivery contracts signed between Russia and the EU specify the currency Russia will receive and these contracts should be adhered to. But we aren’t in normal circumstances. The EU imposed tough sanctions on Russia over the Ukraine conflict and Russia now feels it has to defend its economy and interests, hence President Putin’s demand for payment in rubles for his gas supplies to the EU. This is the price Poland and Bulgaria are now paying for not accepting to pay in rubles.
So the choice for the EU is rubles or no gas. Ursula von der Leyen, the EU commission President can claim that Russia has weaponized natural gas and uses it as an instrument of blackmail, promise that the EU will ensure alternative gas supplies and pledge a coordinated response to Gazprom halting gas supplies to Poland and Bulgaria. But this is no more than hot air. She knows that there is no replacement to Russian gas supplies now or for the foreseeable future. So she will end up eating a humble pie and accept rubles for gas.
Already four European buyers have already paid for Russian gas in rubles and ten companies in Europe have already opened accounts at Gazprombank, which President Putin has designated as the bank that will be handling the payments in rubles for Russian gas.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London