The European Union on Wednesday said it was mapping out a "coordinated" response after Russian energy firm Gazprom abruptly announced it was halting gas supplies to Poland and Bulgaria, a dramatic escalation and Kremlin’s toughest retaliation yet to international sanctions over the war in Ukraine.

One day after the United States and other Western allies vowed to send more and better military supplies to Ukraine, Moscow upped the ante, using its most essential export as leverage. European gas prices shot up on the news, which European leaders denounced as "blackmail."

Poland confirmed that supplies had been cut, while Bulgaria said it would find out soon. Both accused Gazprom of breaching longstanding supply contracts.

Both countries' leaders accused Moscow of using natural gas to blackmail their countries.

Gazprom said in a statement it had "completely suspended gas supplies to Bulgargaz and PGNiG due to absence of payments in rubles," referring to the Polish and Bulgarian gas companies.

Russian President Vladimir Putin demanded that buyers from "unfriendly" countries pay for gas in rubles or be cut off, starting from the date payments are due for April. The European Union has rejected this demand as rewriting contracts that called for payment in euros.

Poland, a historical rival of Russia, has been a major gateway for the delivery of weapons to Ukraine and confirmed this week that it is sending the country tanks. It said it was well prepared for Wednesday’s gas cutoff.

It receives its gas through the Yamal-Europe pipeline from Russia’s huge gas fields in the Arctic far north, which continues west to supply Germany and other European countries. Bulgaria is supplied through pipes over Turkey.

Polish state-owned PGNiG confirmed its supplies from Gazprom had been cut but said it was still supplying its own clients as needed.

"Cutting gas supplies is a breach of contract and PGNiG reserves the right to seek compensation and will use all available contractual and legal means to do so," the company said.

Bulgaria said Tuesday that it also was informed by Gazprom that the country's gas supplies would end at the same time, but officials in Sofia said Wednesday morning that they were still seeing gas arrive.

Supplies from Gazprom cover about 50% of Poland’s consumption and about 90% of Bulgaria’s. Poland said it did not need to draw on reserves and its gas storage was 76% full. Bulgaria has said it is in talks to try to import liquefied natural gas (LNG) through Turkey and Greece.

Poland also has ample natural gas in storage, and it will soon benefit from two pipelines coming online, analyst Emily McClain of Rystad Energy said.

Russia’s energy exports had until now continued largely unhindered since the war began, the biggest loophole in sanctions that have otherwise cut off Moscow from much of its trade with the West.

Kyiv has called on Europe to stop funding Moscow’s war effort by cutting off energy imports that bring Russia hundreds of millions of dollars a day.

Germany, the biggest buyer of Russian energy, said this week it is hoping to stop importing Russian oil within days. But weaning Europe off cheap and abundant Russian natural gas, which heats its houses, fuels its factories and drives its electric power plants, would be a far more disruptive prospect.

'Blackmail'

Gazprom’s decision to cut gas to the two European countries marks another dark turn in the war, which has revived the geopolitical rifts of the Cold War, and it had an immediate impact. European gas prices spiked 25%, with benchmark Dutch futures jumping from around 100 euros ($105) per megawatt hour to around 125 euros.

The gas cuts do not immediately put the countries into dire trouble since they have worked on getting alternative sources for several years now and the continent is heading into summer, making gas not as essential for households.

Still, the move sent shivers of worry through the 27-nation European Union, which immediately convened a special coordination group to limit the impact of the move.

European Union officials were holding emergency talks on Wednesday. European Commission President Ursula von der Leyen said the announcement by Gazprom "is yet another attempt by Russia to use gas as an instrument of blackmail."

Polish Prime Minister Mateusz Morawiecki told Poland's parliament on Wednesday that he believed the action was revenge for new sanctions against Russia that Warsaw imposed over the war in Ukraine.

Morawiecki vowed that Poland would not be cowed by the cutoff. He said the country was safe from an energy crisis thanks to years of efforts to secure gas from other countries.

Lawmakers stood and applauded when he said that Russia’s "gas blackmail" would have no effect on Poland.

Bulgarian Prime Minister Kiril Petkov also called the suspension of gas deliveries blackmail and said it was "a gross violation of their contract."

"We will not succumb to such a racket," he added.

"Because all trade and legal obligations are being observed, it is clear that at the moment the natural gas is being used more as a political and economic weapon in the current war," Bulgarian Energy Minister Alexander Nikolov said.

Andriy Yermak, chief of staff to Ukrainian President Volodymyr Zelenskyy, said Russia was "beginning the gas blackmail of Europe."

"Russia is trying to shatter the unity of our allies," Yermak said.

Who's next?

Russia's action has raised wider concerns that other countries could be targeted next as Western countries increase their support for Ukraine amid a war now in its third month.

Russian supplies to Poland already were expected to end later this year anyway. Poland has worked for many years to secure supplies from other countries.

Several years ago, the country opened its first terminal for liquefied natural gas, or LNG, in Swinoujscie, on the Baltic Sea coast. A pipeline from Norway is due to start operating this year.

Bulgaria's energy minister said his country can meet the needs of users for at least one month.

"Alternative supplies are available, and Bulgaria hopes that alternative routes and supplies will also be secured at the EU level," Nikolov noted.

The Greek government was to hold its own emergency meeting in Athens. Greece’s next scheduled payment to Gazprom is due on May 25, and the government must decide whether it will comply with the demand to complete the transaction in rubles.

Greece is ramping up its liquefied natural gas storage capacity, and has contingency plans to switch several industry sectors from gas to diesel as an emergency energy source. It has also reversed a program to reduce domestic coal production over the next two years.

Europe is not without leverage in the dispute; at current prices, it pays Russia some $400 million a day for gas, money Putin would lose with a complete cutoff.

Russia can in theory sell its oil elsewhere, such as to India and China, because oil primarily moves by ship. But the gas pipeline network that carries gas from the huge deposits in northwestern Siberia's Yamal Peninsula does not connect with pipelines that run to China. And Russia only has limited facilities to export super chilled liquefied gas by ship.

Counterproductive?

Fatih Birol, the head of the Paris-based International Energy Agency (IEA), described Russia's move as a "weaponization of energy supplies."

He said in a tweet that Russia’s decision "makes it clearer than ever that Europe needs to move quickly to reduce its reliance on Russian energy."

Russia's decision is likely to be counterproductive because it demonstrates that dependence on Russia makes countries vulnerable to coercion, Western officials said on Wednesday.

The officials, who spoke on condition of anonymity, told Reuters the move underlined the reason why it was necessary for the West to reduce its dependency on Russian hydrocarbons.

Scrambling for alternatives

Russian gas deliveries to Austria are continuing unrestricted and there is no indication that will change, its government said on Wednesday while adding it is scrambling to find alternative sources.

Austria obtains 80% of its natural gas from Russia, a heavy dependency that it says will take time to end now that Russia's invasion of Ukraine has made plain the need to shift away from Europe's cheapest source of gas.

"Since the start of the war delivery volumes have not changed. In fact, they have increased," Austrian Chancellor Karl Nehammer told a news conference.

He and energy minister Leonore Gewessler added that the government was budgeting up to 5 billion euros to fill the nation's gas reservoirs to 80% of capacity by the autumn from 18% now, on top of 1.6 billion euros already earmarked this year for a strategic gas reserve.

Nehammer repeated that when he met Putin two weeks ago Putin assured him that Austria would keep receiving the contractually agreed volumes of gas and that Austria could keep paying in euros deposited at Gazprombank, which then converts them into rubles.

Nehammer said Austria, Germany and others have adopted to use of the payment system through Gazprombank.

At the same time, Nehammer said deliveries were not guaranteed since the pipelines that supply Austria run through Ukraine, and no one can know how the war will develop.

While working with the European Commission on joint purchases for European Union member states, Austria and its partly state-owned oil company OMV are looking to secure extra gas supplies, Nehammer said.

"There is Norwegian gas, there is gas from Azerbaijan – how can we bring these gas volumes to us?"