Russia expanded its gas cuts to Europe on Tuesday, with energy giant Gazprom (MCX:GAZP) cutting off supplies to leading Dutch trader GasTerra, intensifying the economic spat between Moscow and Brussels.
The move comes one day after Denmark signaled a possible end to its Russian gas supply and the European Union’s biggest action so far against Russia for its invasion of Ukraine, an agreement to suspend seaborne imports of its oil.
GasTerra, which purchases and markets gas on behalf of the Dutch government, has contracted elsewhere for the 2 billion cubic meters (bcm) of gas from Gazprom that it had anticipated receiving through October.
This is not yet viewed as a threat to supplies, according to Pieter ten Bruggencate, a spokesperson for the Ministry of Economic Affairs.
Monday, Danish company Orsted (OTC:DOGEF) issued a warning that Gazprom Export might also suspend its delivery, but that such a decision would not immediately threaten Denmark’s gas supplies.
Moscow has already cut off natural gas supplies to Bulgaria, Poland, and Finland, citing their refusal to pay in Russian rubles, a demand made in reaction to Western sanctions that have isolated Russia by cutting it off from SWIFT.
The gas supply cuts have increased already high gas prices, accelerating inflation and prompting European governments and businesses to seek alternate gas supplies and the infrastructure to manage them, such as floating storage and regasification units (FSRUs).
Monday, European Union leaders decided in principle to reduce EU oil imports from Russia by 90 percent by the end of the year, thereby increasing pressure on Russia over its invasion of Ukraine, which Moscow calls a “special military operation.”