Russian state-run natural gas giant Gazprom announced on June 30 that it has halted gas shipments to Latvia because of contract violations.
Russia has already cut off gas supplies to Poland, Bulgaria, Finland, the Netherlands, and Denmark, which refused to pay for gas in line with an order by President Vladimir Putin requiring ruble accounts to be set up in a Russian bank as part of a new settlement scheme.
In a brief statement, gas giant Gazprom said the shipments were stopped because Latvia broke “terms for extraction of gas.” It did not elaborate.
The move by Gazprom comes a day after the Latvian energy company Latvijas Gaze said it was buying gas from Russia but not from Gazprom, without naming from whom. It also said it was paying in euros and not in rubles.
After the EU imposed sanctions against Russia over its invasion of Ukraine, Putin said in March that “unfriendly foreign buyers” would have to transact with Gazprom in rubles instead of dollars and euros.
The Kremlin said importers had to establish an account in dollars or euros at Russia’s third-largest bank, Gazprombank, then a second account in rubles. The importer would pay the gas bill in euros or dollars and direct the bank to exchange the money for rubles.
The European Commission -- which has warned that complying with Putin's order could breach European Union sanctions against Moscow -- has urged EU companies to continue paying in the currency agreed in their contracts with Gazprom, the vast majority of which are in euros or dollars.
Riga recently declared that it wanted to completely stop importing Russian gas from January 2023.
Last year, Latvia still bought about 90 percent of its gas from Russia but is seeking to diversify its supplies and set up strategic reserves.
Latvia has already started importing gas from Lithuania and has begun the process of setting up a liquefied natural gas terminal.