Geoffrey Smith 

Investing.com – European prices dropped slightly Wednesday afternoon, as Europeans shrugged off the news that Russia’s natural gas flow had been cut for the first time.

At 5:30 am ET (9:30 GMT), the front month contract which is a benchmark in north-west Europe’s North-West Europe had fallen 2.3% to 96.50 euro per megawatt hour, after rising as high as 104.5 euros during the opening hours of trading.  

Naftogaz, Ukraine’s largest gas pipeline operator, said late Tuesday that it is no longer responsible to transit through territories occupied Russian forces. It claimed that illegal siphoning of gas from pipelines downstream of Sokhranivka, which was under Russian control, was the reason.

The flow through Sokhranivka, or Sokhranovka to Russian in Russian, was responsible for about one-third the gas that flows through Ukraine into the EU.

“Gazprom can move this volume to another interconnection point with Ukraine,” Naftogaz CEO Yuriy Vitrenko said via Twitter. Bloomberg and Reuters report that although transmission volumes to other points have increased, it didn’t compensate for Sokhranovka. 

Gazprom (MCX) did not immediately indicate that it was planning to reduce supplies. Gazprom (MCX:) had cut off supplies to Poland and Bulgaria earlier in the month, citing Poland’s refusal to pay in rubles for delivery. This was in response to a unilateral Russian presidential decree that changed their contract. EU considers that the EU’s requirement of ruble payments is a breach. 

Analysts warned Russia that it could enforce the ruble-payment order more aggressively than usual and cut supplies to even more countries if they push ahead with the EU’s plans to put an embargo on Russian oil by the end this year. These plans remain in the works due to opposition from Hungary, and other member countries of central and eastern Europe whose energy security is more dependent on Russian pipelines.