The announcement is the latest escalation in the energy dispute between Russia and the European Union. Gazprom had already stopped annual gas deliveries to customers in at least six European countries, namely Poland, Bulgaria, Finland, Denmark, Germany and the Netherlands, because they did not make payments in rubles.
Moscow is demanding payments in rubles in retaliation for sanctions imposed on Moscow by western countries over its war in Ukraine.
The sanctions have frozen large parts of Russia’s foreign exchange reserves and cut off its financial institutions from the international banking system. By insisting on ruble payments, Moscow is essentially forcing Europe to buy its currency.
Gazprom’s announcement came just a day after Latvian energy company Latvijas Gaze said it would buy gas from neighboring Russia, adding that it was not buying from Gazprom and was paying in euros.
Earlier this month, Latvia’s parliament voted on a proposal to ban Russian gas supplies from January 2023.
Meanwhile, Gazprom also drastically reduced inflows through the Nord Stream 1 pipeline earlier this month, accusing the West of holding back vital equipment due to sanctions. Europe said Russia’s actions were politically motivated.
The pipeline, which provided about 35% of Europe’s total Russian gas imports last year, was closed for 10 days for routine maintenance. When imports resumed last week, gas was flowing through Nord Stream 1 at 40% of its total capacity.
The move prompted Germany to declare a “gas crisis” and activate the second phase of its three-stage emergency gas program, bringing it one step closer to rationing industrial supplies
The EU, of which Latvia is a member, last week agreed to cut natural gas demand by 15% this winter to save on gas “to prepare for possible disruptions in gas supplies from Russia”.
However, the bloc has watered down its ambitions by giving countries significant leeway. The EU will exempt countries that are not connected to other members’ gas networks from the 15 percent target because “they would not be able to release significant amounts of pipeline gas in favor of other member states,” the EU Council said into a press release.