Russia cut gas supplies to Europe after state-owned energy giant Gazprom cut taps to a prominent Dutch trader and cut supplies to some companies in Denmark and Germany.
The economic battle intensified on Tuesday over Russia’s invasion of Ukraine in the wake of the European Union’s overnight decision to impose a ban on most Russian oil imports as part of its financial sanctions against the Kremlin.
European Union leaders said the ban would immediately affect 75 percent of Russia’s oil imports, and rise to 90 percent by the end of the year.
Gazprom on Tuesday extended gas cuts by halting supplies to GasTerra, which buys and trades gas on behalf of the Dutch government.
It later said it would also reduce gas flows to Danish energy company Ørsted and Shell Energy due to its contract to supply Germany with gas after the two companies failed to make ruble payments.
Gas Terra said it had reached contracts elsewhere to supply the 2 billion cubic meters of gas it had been expecting from Gazprom by October.
Ahead of the overnight talks in Brussels, Denmark had hinted that it expected Russian gas supplies to be halted. However, Ørsted said on Monday that the gas shutdown would not immediately jeopardize the country’s gas supply.
Moscow has already halted natural gas supplies to Bulgaria, Poland and Finland after they refused to pay Russian rubles.
Gazprom said Shell Energy Europe Ltd. told it it would not pay for gas supplies to Germany in rubles. The contract stipulated a gas supply of 1.2 billion cubic meters per year.
Gazprom said Shell and Ørsted had not paid for gas supplies by the end of the working day on May 31 and would halt supplies until they paid in accordance with Russian demands.
Earlier in the spring, the Kremlin demanded payments for exports in rubles after the country’s currency fell off a cliff after the invasion of Ukraine and Russia banned Swift’s international messaging system in previous rounds of sanctions.
The European Union Energy Commissioner had earlier said that member states should reject Moscow’s demands because the mechanism set by Russia would have violated the bloc’s sanctions, even if it left it without alternative gas supplies.
Supply cuts have pushed up already high gas prices, contributing to rising inflation and also putting pressure on European governments and companies to find alternative supplies and infrastructure, including storage facilities.
The European Union has been criticized in recent weeks for not going far enough in its sanctions against Russia. Ahead of Monday’s summit in Brussels, Ukrainian President Volodymyr Zelensky appealed to European Union leaders to show unity against Vladimir Putin.
Under a compromise plan from the summit, Russian oil transported through the Soviet-era Druzhba pipeline for use through Hungary, the Czech Republic and Slovakia would be exempted from the EU embargo.
Despite this deal, the Estonian prime minister urged the EU to go ahead and work on a seventh round of sanctions against Russia that would include restrictions on gas imports.
However, Kaja Klass said she is not confident that this will happen. “I think gas should be in the seventh package, but I am also realistic,” Kallas told reporters upon her arrival in Brussels on the second day of talks. “I don’t think there will be.”