Gazprom announced the termination of gas supplies to Latvia

The announcement is the latest escalation in energy disputes between Russia and the European Union. Gazprom has already cut off annual gas supplies to consumers in at least six European countries, namely Poland, Bulgaria, Finland, Denmark, Germany and the Netherlands, due to their failure to make payments in rubles.

Moscow demands payment in rubles in response to the sanctions imposed on Moscow by Western countries in connection with its war with Ukraine.

The sanctions froze a significant portion 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 own currency.

Gazprom’s announcement came just a day after Latvian energy company Latvijas Gaze announced it was buying gas from neighboring Russia, adding that it was not buying gas from Gazprom and was paying in euros.

Earlier this month, the Latvian parliament voted in favor of a proposal to ban Russian gas supplies from January 2023.

EU agrees to ration gas, but some countries fight

Meanwhile, earlier this month, Gazprom also drastically cut flows through the Nord Stream 1 pipeline, accusing the West of withholding vital equipment due to sanctions. Europe called Russia’s actions politically motivated.

The pipeline, which carried about 35% of Europe’s total gas imports last year, was shut down for 10 days for scheduled maintenance work. When import resumed Last week, gas through Nord Stream 1 was running at 40% of its full capacity.

The move prompted Germany to declare a “gas crisis” and activate the second phase of its three-phase gas emergency program, bringing it one step closer to rationing industrial supplies.

The EU, of which Latvia is a member, agreed last week reduce demand for natural gas by 15% this winter to save gas, “to prepare for possible disruptions in gas supplies from Russia.”

However, the bloc toned down its ambitions by giving the countries considerable leeway. The EU will exempt countries that are not connected to the gas networks of other members from the 15% target, as “they will not be able to release significant volumes of pipeline gas to other member states,” the EU Council said in a statement. Press release.