MOSCOW, Russia: Russia's Gazprom said it will turn off gas shipments to several "unfriendly" countries, which have refused to accept Moscow's demand to pay for its gas in roubles.
Moscow's move, its latest retaliation to Western sanctions imposed after its invasion of Ukraine that began on 24th February, is aimed at escalating its economic battle with the European Union and pushing up European gas prices.
This week, Gazprom said it had fully cut off gas supplies to Dutch gas trader GasTerra, adding that on 1st June it would also stop providing gas to Denmark's Orsted and Shell Energy.
The announcements follow this week's agreement by EU leaders to cut imports of Russian oil by 90 percent by the end of the year.
GasTerra, which buys and trades gas on behalf of the Dutch government, said it has signed other contracts to make up for the 2 billion cubic meters of gas it should have received from Gazprom through October.
However, the impact of the cut-off remains unknown. "This is not yet seen as a threat to supplies," said Dutch Economy Affairs Ministry spokesperson Pieter ten Bruggencate.
Earlier, Orsted said it would turn to the European gas market to fill the gap.
In a statement shortly after Gazprom's announcement, Orsted Chief Executive Mads Nipper said, "The gas for Denmark must, to a larger extent, be purchased on the European gas market. We expect this to be possible."
"While the market was largely expecting both companies to be cut off, this development will make the supply-demand balance that much tighter," ICIS analyst Tom Marzec-Manser said on Twitter.
Also, gas sent to Germany by Russia via the Nord Stream pipeline stopped flowing, which analysts said was likely due to the Netherlands being cut off.
Citing their refusal to pay in Russian roubles, a demand made in response to Western sanctions aimed at isolating Russia, Moscow had already stopped natural gas supplies to Bulgaria, Poland and Finland.
However, German, Italian and French companies have said they would pay in roubles to maintain supplies.
Wary of Russian supply cuts, which provides some 40 percent of Europe's gas, EU countries has been urgently filling their gas storage sites ahead of next winter.