Ukraine-Russia War News: Live Updates
BRUSSELS — Reverberations from the Ukraine war widened on Wednesday, jolting energy markets and spilling across borders, as Russia responded to the West’s escalating arms shipments and economic penalties by halting gas supplies to two European nations and threatening further unspecified retaliation.
The European Union’s top official described as “blackmail” the announcement that Russia was suspending shipments of natural gas to Poland and Bulgaria. Though the immediate impact was likely to be limited, the cutoff was the Kremlin’s toughest retaliation yet against a U.S.-led alliance that President Vladimir V. Putin has accused of waging a proxy war aimed at weakening Russia.
Even as news of a U.S.-Russia prisoner exchange offered a glimmer of hope for diplomatic engagement, Mr. Putin warned that he would order more “counterstrikes” against any adversaries that “create threats of a strategic nature unacceptable to Russia.”
At the same time, a series of explosions across Ukraine’s borders stoked fears that the war, now in its third month, might spread. Blasts were reported in three Russian districts on Wednesday morning, and suspicion fell on Ukrainian forces, which are benefiting from increasingly sophisticated weapons and intelligence from the United States and its allies.
Those blasts came a day after explosions shook Transnistria, a pro-Russian breakaway region of Moldova, on Ukraine’s southwestern flank. Some analysts — and Ukrainian and Moldovan officials — said it was likely that Russia, which has thousands of troops in Transnistria, had orchestrated the explosions to create a pretext to invade Ukraine from that direction.
Taken together, the developments raised the risk of worse to come.
“What’s the ‘so what’ of this escalatory cycle? Further escalation becomes more likely as animosity builds,” said Cliff Kupchan, chairman of the Eurasia Group, a political risk consulting organization. “The chance that Russia hits a staging facility in Poland goes up. The risk that NATO supplies aircraft to Ukraine goes up. Ukraine could strike bigger targets in Russia. Moscow could cut gas to more European nations.”
Economists warned that Europe could face a sharp slowdown of growth if the cutoff of sales by Gazprom, Russia’s state-owned gas company, spreads — or if Europe imposes an embargo on Russian gas. European natural gas prices surged as much as 28 percent on Wednesday and the euro’s value fell below $1.06 for the first time in five years on rising concerns about energy security and a slowdown in European growth. The currency has fallen nearly 4 percent against the U.S. dollar in April alone.
Gazprom’s stated reason for halting gas deliveries was the refusal by Poland and Bulgaria to pay in rubles, a new requirement Russia announced last month, despite the fact that its foreign contracts generally call for payment in dollars or euros. Most European buyers have not complied, which would subvert European Union financial sanctions imposed on Russia after the Ukraine invasion and help prop up the battered ruble.
The European Union had been preparing for the possibility that Russia might halt natural gas…
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