Russian President Vladimir Putin has issued a decree that foreign buyers must pay for Russian gas in roubles starting on Friday, or else their supplies may be cut. European capitals have rejected this move, with Berlin calling it "blackmail". This decision could result in Europe losing more than a third of its gas supply, with Germany, the most heavily reliant on Russia, activating an emergency plan that could lead to rationing. Putin is using energy exports as a powerful tool to retaliate against Western sanctions imposed on Russian entities in response to the invasion of Ukraine, which Moscow refers to as a "special military operation". In a televised speech, Putin stated that those purchasing Russian gas must have rouble accounts in Russian banks for payments starting on April 1. Failure to do so will be considered a default, leading to contract termination. It is uncertain if there will be alternative payment methods for foreign companies, as the EU and G7 have rejected the use of roubles. His choice to require payments in rubles has helped the Russian currency, which had dropped to record lows following the invasion on February 24th, to regain much of its lost value. Western companies and governments have refused to alter their gas supply contracts to change the payment currency, as most European buyers currently use euros. Executives believe that it would require several months or more to renegotiate the terms. Paying in roubles would help lessen the impact of Western restrictions on Moscow's access to foreign exchange reserves. European countries are scrambling to find other sources of energy, but the global market is limited, leaving them with few choices. The US has offered to provide more liquefied natural gas (LNG), but it is not sufficient to completely replace Russian gas. Germany's Economy Minister, Robert Habeck, stated that Russia has failed to divide Europe and that Western allies are committed to not being manipulated by Russia. Berlin announced that it will continue to pay for Russian energy imports in euros. France's economy minister, Bruno Le Maire, mentioned that France and Germany are preparing for a potential situation where Russian gas supply could be stopped. Le Maire did not provide details on the technical aspects related to Russia's recent request for payments in roubles. Putin's order allows for payments to be made through special foreign currency and rouble accounts at Gazprombank, with foreign currency being converted to roubles through currency auctions on a Moscow exchange. Putin believes this change will enhance Russia's independence, as he feels Western countries are using the financial system as a tool against Russia. Therefore, Putin sees it as unnecessary for Russia to trade in dollars and euros when assets in those currencies are being frozen. Putin questions what is currently happening and what has already occurred. We have given European customers our resources, specifically gas. They accepted it, paid us in euros, and then stored the euros themselves. As a result, it seems that we provided some of the gas to Europe at a very low cost," he stated. "This situation cannot persist." Putin emphasized that Russia still cares about its business reputation. "We will continue to fulfill our obligations under all contracts, including gas contracts, by supplying gas in the specified volumes and at the prices outlined in our existing long-term agreements," he stated. Many European companies with Russian contracts either had no response or did not comment immediately following Putin's announcement, causing further concern in the market. The escalating tension with Russia has led to a surge in European gas prices in recent months, heightening the risk of a recession. The rising energy costs have already resulted in production cutbacks for companies in industries such as steel and chemicals. Poland's PGNiG, which has a long-standing contract with Russia's Gazprom that expires at the end of the year, did not have an immediate response. The Climate Ministry of Poland did not give an immediate response. Poland's agreement with Gazprom is for 10.2 billion cubic meters of gas annually and is in dollars. Eni, an Italian energy company and another significant purchaser of Russian gas in Europe, also had no comment. In 2020, Eni purchased approximately 22.5 billion cubic meters of Russian gas. Its contracts with Gazprom will end in 2035. Buyers of Russian gas in Germany, including Uniper, RWE, EnBW, and VNG, did not provide a comment in response to requests.