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Ukraine war: Russia to cut gas supply to Poland and Bulgaria

Ukraine war: Russia to cut gas supply to Poland and Bulgaria

In a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine, Russia will cut off the gas to Poland and Bulgaria on Wednesday, Bloomberg reported.

Russia had previously threatened to cease gas supplies to any country that refuses Russian President Vladimir Putin's stipulation that countries pay for Russia's gas in rubles, but the European Union has insisted that in doing so, sanctions on Russia would be breached.

Poland and Bulgaria are both members of the European Union (EU), and the decision to cut off their gas is a major escalation in the fight. Both countries are also members of NATO.

"This is a turning point that has been accelerated by Russia today," said Piotr Naimski, Poland's top official for strategic energy infrastructure.

The focus now turns to other European capitals, particularly Germany, which is heavily dependent on Russian gas. There was no immediate reaction from Berlin.

"Any buyer rejecting the new payment procedure out of hand is running a very real risk of supplies being cut," said Katja Yafimava, senior research fellow at the Oxford Institute for Energy Studies.

In Rome, the government is monitoring the situation, and the concern is that what is happening to Poland could now occur elsewhere, according to a person familiar with the situation.

For now the assessment is that there is no immediate risks to cut off gas to Italy, the person said. Italy is also a major importer of Russian gas, though it's taking steps to diversify its supply.

"The decision of Russia to stop gas supplies to Poland and Bulgaria represents an historical turning point in the bilateral energy relationship and might well represent the preview of similar moves coming up vis-a-vis other European countries in coming weeks," said Simone Tagliapietra, a researcher at the Bruegel think tank. "European governments now need to deploy all emergency measures they have at their disposal, both on the supply and demand side to ensure security of supply."

Other companies have more time and European governments and executives are in many cases still trying to figure out how best to respond. The EU last week suggested that companies continue to pay in euros, and seek possible exemptions from Moscow to the decree.

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TAGS:gas supply NATO Ukraine war russia 
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