Stock Groups

Russia halts gas supplies to Poland, Bulgaria


Gazprom employees on Russia’s Yamal Peninsula.

Getty Images| Bloomberg | Getty Images

Russia’s supply of gas to Eastern Europe is in great doubt after its massive state-owned gas company. GazpromThe company informed Bulgaria and Poland that supplies would be halted.

Both countries have refused Moscow’s request to pay in rubles for their gas supplies. However, the move coincides with tensions rising between Russia and its allies as the war in Ukraine continues.

Early Wednesday morning, Gazprom released a statement saying it had halted supplies to both Poland and Bulgaria — both heavy consumers of Russian gas — due to payments not being made in the Russian currency. Gazprom stated that supplies will resume after these payments are made.

In the statementGazprom issued a warning to both countries about the danger of “unauthorized withdrawal” from gas supplies that were flowing through their territory.

Transit states are Bulgaria and Poland. This volume will reduce supplies to transit countries in the event of an unauthorized withdrawal from Russian gas transit volumes.

On Wednesday, natural gas prices in Europe soared. Wednesday morning saw a rise in natural gas prices across Europe. The benchmark European wholesale gas contract rose by 24.2%, to 115.75 euro per megawatt hour. Meanwhile, the U.K. natural gasoline price rose about 20pence to 222 pence per therm for June.

Be forewarned

PGNiG, Poland’s oil and gas state company, said that Gazprom informed them on Tuesday that supplies to Poland via Yamal Pipeline would be halted starting Wednesday morning.

According to Reuters, however, gas prices dropped to zero on Wednesday and have since risen, as data from European Union gas transmission operators revealed. Poland however stated that the supply had been stopped.

While Bulgaria does not confirm that supplies were stopped, Kiril Petrov, the prime minister of Bulgaria, called it “blackmail” as he said there was no way to stop supplies. According to Reuters, Alexander Nikolov, Bulgaria’s Energy Minister said that supplies were assured for at least a month.

Situation being monitored

In the meantime, eastern Europe’s gas supplies appear to be in flux, and under threat, as Western support for Ukraine — and pressure on Russia — only increases.

PGNiG, Poland’s largest gas company said in a statement TuesdayAccording to the company, it monitors the situation closely and has plans for different scenarios. It also intends to continue receiving gas from other sources. The company stated however that it has sufficient gas storage to supply the current needs.

According to EU data, Bulgaria imported 73% of its natural gasoline from Russia in 2020. Poland, however, imported 45% from Russia the same year. This is just below the EU average of 40%. It shows the EU’s dependence on Russian natural gas imports.

Moscow’s invasion of Ukraine caused the EU to accelerate a decrease in Russian energy imports. has caused the already-controversial Nord Stream 2 gas pipeline between Russia and Germany, another country heavily reliant on Russian gas, to be abandoned.

Russia did not demand that every country pay rubles to get gas.

Hungary — whose strongman leader Viktor Orban has friendlier ties with President Vladimir Putin — has broken ranks with its EU partners by agreeing to pay for Russian gas in rubles.

The country’s foreign minister stated Wednesday that it is currently receiving Russian gas under its Gazprom contract via Bulgaria and Serbia.

Peter Szijjarto, Foreign Minister of Bulgaria said that “I would like to assure everybody that non-delivery gas shipments to Bulgaria doesn’t mean a halt to transit shipments via Bulgaria.” said on his Facebook pageTranslated by Reuters.

He stated that Hungary’s next Russian-gas payment obligation will come due in May. Hungary will then transfer its euros payment to Gazprombank.