Russian President Vladimir Putin has issued a decree stating that foreign buyers must pay for Russian gas in roubles starting Friday or risk having their supplies cut. European capitals have rejected this move, with Berlin describing it as "blackmail". This decision could potentially result in Europe losing more than a third of its gas supply, with Germany, the country most dependent on Russian gas, already implementing emergency plans 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 his televised speech, Putin stated that those purchasing Russian gas must establish rouble accounts in Russian banks for payment starting on April 1. Failure to do so would be considered a default, resulting in contract termination. It is uncertain if there are alternative payment methods for foreign firms, as the EU and G7 have rejected the use of roubles. His choice to mandate payments in roubles has led to an increase in the value of the Russian currency, which had plummeted to record lows following the invasion on February 24th. The rouble has since regained a significant portion of its lost value. Companies and governments in the West have refused to alter their gas supply contracts to accommodate the change in payment currency, as most European buyers currently use euros. Business leaders have indicated that renegotiating terms would be a time-consuming process, potentially taking months or more to complete. 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 alternative energy sources, but the global market is limited, giving them few choices. The United States has offered more liquefied natural gas (LNG), but it is not sufficient to replace Russian imports. Germany's Economy Minister, Robert Habeck, stated that Russia has been unsuccessful in dividing Europe and emphasized that Western allies are committed to not being pressured by Russia. Berlin has announced that it will continue to pay for Russian energy in euros. France's economy minister Bruno Le Maire stated that both France and Germany are preparing for the possibility of Russian gas flows being stopped. Le Maire chose not to discuss the technical specifics related to Russia's recent demands for payment in roubles. Putin has signed an order that allows for payments to be made through special foreign currency and rouble accounts at Gazprombank, with foreign currency being converted into roubles through currency auctions on a Moscow exchange. Putin believes that this change will enhance Russia's independence, as he believes Western countries are using the financial system as a weapon against Russia. Putin argues that it is illogical for Russia to trade in dollars and euros when assets in these currencies are being frozen. We have provided European consumers with our resources, specifically gas, and they paid us in euros which they then stored. Therefore, it is reasonable to believe that we supplied some of the gas to Europe practically at no cost," stated Putin. However, he also acknowledged that this situation cannot persist and emphasized that Russia still values its business reputation. "We will adhere to our obligations in all contracts, including gas contracts, by supplying gas in the agreed-upon volumes and at the prices specified in our existing long-term contracts," he stated. Following Putin's announcement, several European companies with Russian contracts either had no immediate response or declined to comment, causing further concern in the market. The escalating tension with Russia has led to a significant increase in European gas prices in recent months, raising concerns about a potential recession. The surge in energy costs has already resulted in production cuts for companies in industries such as steel and chemicals. Poland's PGNiG, which has a long-term contract with Russia's Gazprom that expires at the end of this year, did not provide an immediate response to the situation. The Climate Ministry in Poland did not provide an immediate response. Poland has a contract with Gazprom for 10.2 billion cubic metres of gas annually, which is in dollars. Eni, an Italian energy company and another significant buyer of Russian gas in Europe, also had no comment. Eni purchased approximately 22.5 billion cubic meters of Russian gas in 2020, and their contracts with Gazprom will end in 2035. Buyers in Germany of Russian gas, including Uniper, RWE, EnBW, and VNG, did not provide a prompt response to comment requests.