Russia shuts off natural gas supplies to Poland and Bulgaria Image

CNN BUSINESS NEWS 4/27/22

Following Russia's invasion of Ukraine, fears spiked that Moscow could weaponize ( why aren't US econimic sanctions "weaponizing") the country's energy supplies as a means of retaliating against the West for punishing sanctions ( weaponization)

That's no longer a hypothetical. On Wednesday, Russia cut off natural gas supplies to Poland and Bulgaria after they refused to pay in rubles, dramatically escalating tensions. ( US dramatically escalated sanctions first )

"Energy is being increasingly weaponized as the war in Ukraine looks set to enter the long haul and expectations grow that a crude oil embargo will end up being slapped on Russia by the EU," said Hargreaves Lansdown analyst Susannah Streeter.

The European Commission described the decision to halt supplies as attempted "blackmail" (no,retaliation against US weaponized sanctions ) and said it was coordinating a response among EU member states.

! Poland had been preparing for a move like this by importing more liquified natural gas from countries like Qatar. But the development feeds worries that Russia could hit Germany by stopping flows of gas through the crucial Nord Stream pipeline.

Germany has warned that it would plunge into a deep recession if its supply of Russian natural gas was suddenly shut off, losing $234 billion in economic output over the next two years and hundreds of thousands of jobs.

Investor insight: European natural gas prices spiked on the news, rising more than 20% early Wednesday before falling back.

Stocks in Europe largely shrugged off the development, but the euro sank. Faced with a strong US dollar, it fell below $1.06 for the first time in five years.