Russia Turns off the Tap for Polish and Bulgarian Oil

Russia’s state-owned Gazprom announced that it had suspended gas exports to Poland and Bulgaria after both the nations declined to pay for Russian gas in rubles, as per the demand made by President Vladimir Putin in March. Bulgaria titled Moscow’s export ban as “blackmail” while Russian gas flows into Poland stopped to zero on Wednesday morning.

However, after preparing to drop off entirely, data from the European Union displayed that gas imports from Russia eked back up from zero during the day. At the same time, Bulgaria is yet to confirm that Russian gas flowing through its geography has absolutely halted.

The logistics of pipeline gas supply means that, in practice, Russian gas may continue to flow to both countries even if Russia says it had disconnected the taps. 

Disconnecting the tap could also impact downstream deliveries because not every customer receives gas through a dedicated pipeline. As per Yan Qin, a lead analyst at Refinitiv, more than half the gas piped into Bulgaria is meant for other nations.

Russian gas piped to Serbia, Greece, Hungary, and other nations across Europe all transits through Bulgaria. Therefore, to continue delivering energy to Greece, Gazprom may have to continue pumping gas through Bulgaria even though Moscow has “cut off” the nation’s gas flow.

Poland is a different topic. The country has been a crucial waypoint for Russian gas en route to Germany, with 23% of German-bound gas from Russia in 2020 traveling through Poland. 

However, flows from Poland and Germany have reduced considerably over the past few months. Germany may also get its gas direct from Russia through the Nord Stream pipeline, which goes through Poland. 

Suppose Russia is forced to keep up the pumping gas through transit states like Bulgaria even though Moscow officially disrupted supplies to the nation. In that case, it risks some of that throughput falling victim to an “unauthorized offtake.”

When Russia announced that it was suspending sales to Bulgaria and Poland, Gazprom highlighted the risk that the “unauthorized offtake of Russian gas from the volumes intended for transit into third countries” would lessen overall shipments. Apparently, Gazprom knows that it will have to resume pumping through pipes that run across the borders of its blocked customers, even if it disconnects the taps.