Russia halted gas supplies to Bulgaria and Poland.
On 27 April, Russia halted gas supplies to Bulgaria and Poland, two countries that both heavily rely on Russian gas imported via a pipeline. They’re the only two European countries with Gazprom contracts due to expire at the end of 2022, which meant their search for alternatives was underway. The two were the first who were due to pay in rubles and who denied doing so, given the common EU position.
The country consumes about 3 billion cubic metres of gas per year and imports more than 90 per cent of it from Russia. However, the Bulgarian energy sector does not depend to such a large extent on natural gas. In 2019, it represented 12.9% of the country's energy mix. Bulgaria is more dependent on solid fuels (28.1%), oil (25.5%), nuclear energy (22.7%) and even renewables (13.1%).
The executive director of Bulgarian gas network operator Bulgartransgaz said supplies to Bulgaria were still currently flowing.
Bulgaria also transports Russian gas via an extension of the Turk Stream pipeline to neighbouring Serbia and from there to Hungary. Hungary and Austria have also said gas supplies were regular.
Bulgarian energy minister Alexander Nikolov has said Bulgaria had paid for Russian gas deliveries for April and claimed supplier Gazprom will be in breach of its current contract if it halts the flow. He added that “[Russian] natural gas is being used more as a political and economic weapon in the current war”.
Bulgarian Prime Minister Kiril Petkov called Gazprom's suspension of gas deliveries to his country "a gross violation of their contract" and "blackmail".
Russia’s economy has been hit by Western sanctions, though the European Union has stopped short of placing curbs on energy imports. Europe gets about 40 per cent of its gas from Russia, paying 200 million to 800 million euros ($300 million to $1.2 billion) per day so far this year. Currently, nearly all Russian gas purchase contracts are denominated in euros or US dollars, according to consultancy Rystad Energy.
Countries pay in advance for their gas, but as they have gone to pay for future supplies, Russia has stood firm on its demand made last month that new purchases need to be paid in rubles. The threat, in which Russian President Putin said "existing contracts will be stopped", has been seen as an attempt to boost the ruble, which has been hit by Western sanctions.
Payments in rubles would benefit the Russian economy and shore up its currency.
So what next?
Nathan Piper, head of oil and gas research at Investec, has told the BBC the halting of supplies to Poland and Bulgaria was the "start of Russia exerting economic pressure on Europe," and a move which could "escalate" with other EU nations.
The cut-off has come as the weather turns warmer and the need for gas heating dwindles. Poland has said that it has ample gas in storage, and Bulgaria is seeking supplies from Greece and Turkey, with no restrictions on gas consumption currently required.
Nevertheless, experts think that if the cut-off lasts for many months or spreads to other countries, it could cause havoc.