Russian president Vladimir Putin escalated a threat to cut off gas exports to “unfriendly countries” today (March 31). He signed a decree requiring foreign buyers to pay for Russian gas in rubles by tomorrow, or else face consequences.
“Nobody sells us anything for free, and we are not going to do charity either—that is, existing contracts will be stopped,” Putin said. The Russian economy has been decimated by Western sanctions imposed over its invasion of Ukraine, with the stock market closing for several weeks and the value of the ruble hitting record lows.
Europe, which imports 40% of its natural gas from Russia, is preparing for potential shortages should Putin make good on his threat.
On March 30, Germany triggered its first early warning signal in the national gas emergency plan over fears Russia will seriously disrupt energy supplies. The German government said a crisis team is evaluating the country’s gas supply, and encouraging households and businesses to conserve energy.
“We are in a situation where, I have to say this clearly, every kilowatt hour of energy saved helps,” German energy minister Robert Habeck said. Germany is more dependent on Russia for natural gas than any other European country, importing 1.7 trillion cubic feet last year.
France also encouraged “those who can,” particularly businesses and public facilities, to conserve electricity and gas. Though the country gets about 70% of its electricity from nuclear plants, it uses natural gas to heat homes and boost energy supply during peak demand. In an interview with FranceInfo on March 29, energy expert Thierry Bros warned that Putin could cut off the country’s gas supply “at any moment,” and said the country should prepare for such a scenario.
Elsewhere in Europe, Austria has activated its alert system to ensure gas supply security, and said it’s seeking to end all Russian oil imports by the end of the year.
If Russia were to completely cut off gas supplies to Europe it would cost Gazprom, the state-sponsored gas supplier, at least $200 million a day, according to a report by the firm Geopolitical Intelligence Services.