Gazprom Halts Natural Gas Supply to Poland and Bulgaria
Russia’s state-owned natural gas corporation Gazprom will halt the supply of natural gas to Poland and Bulgaria today.
The halt comes as EU nations refused Russian demands for “unfriendly countries” to make natural gas payments in Russian roubles as opposed to the Euro or US dollar. While Poland has diversified its natural gas supply and has a stockpile at 76% capacity, Bulgaria receives 90% of its gas supplies from Russia, meaning the suspension represents a major supply shortfall for the country. This shortfall makes an economic downturn in Bulgaria imminent due to the reliance of Bulgarian industry on gas.
While the suspension represents the first time Russia has enforced its policy of demanding payment in roubles, it is unlikely to extend the suspension to its major EU customers due to the economic damage to Russia—gas export revenue represented 36% of the country’s budget in 2021. From the EU perspective, an end to gas imports from Russia is unlikely in the short to medium-term. Russia supplies approximately 40% of the bloc’s demand. However, a gradual phase-out of Russian gas very likely through the increased use of renewable energy and alternate sources in the long-term.
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