Pressure on Europe to secure alternative gas supplies increased on Thursday as Moscow imposed sanctions on European subsidiaries of state-owned Gazprom a day after Ukraine stopped a major gas transit route.

Gas prices surged, with the key European benchmark gaining 12% as buyers were unsettled by the mounting threats to Europe’s supply given its high dependence on Russia.

Moscow has already cut off supply to Bulgaria and Poland and countries are racing to fill dwindling gas reserves before winter.

Russian gas giant Gazprom has halted pipeline deliveries to Poland and eastern Germany via the Yamal Pipeline following a ruling by Russian authorities.

According to a Gazprom spokesperson, a government resolution published on Wednesday has banned the company from having any dealings with Poland’s Europol Gaz, which owns and operates the Polish section of the pipeline.

Gazprom holds a stake of almost 49% in the Polish section of the pipeline.

According to Gazprom, Poland’s sanctions against the gas producer have deprived the Russian company of its shareholder status in Europol Gaz since 26 April, blocking its voting rights and the ability to repatriate dividends.

The Gazprom spokesperson declined to comment on Gazprom’s relations with Gazprom Germania, which is now under temporary control of German network regulator Bundesnetzagentur.

Europe imports much of its natural gas from energy-rich Russia, and its dependence has come under increased criticism in the wake of Moscow’s invasion of Ukraine.

German Economy Minister Robert Habeck on Thursday accused Russia of using energy as “a weapon.”

The same day, Ukrainian Foreign Minister Dmytro Kuleba called on Europe to end its reliance on Russian gas and cut off Moscow’s “energy oxygen.”

The Yamal-Europe pipeline can carry up to 33 billion cubic meters of gas from fields in Russia’s Yamal peninsula and western Siberia through Belarus and Poland to Germany.

Russia can also ship gas directly to Germany through the Nord Stream pipeline that runs under the Baltic Sea.

Operators on Thursday reported a drop in gas supplies from Russia via a key Ukrainian pipeline to Europe for a second day in a row.

Europe is growing increasingly uneasy over natural gas supplies, with Ukraine on Wednesday halting the flow of Russian gas through its transmission system, citing disruption from Russia’s occupying forces. 

Russia’s new sanctions, which include a total of 30 entities, have increased momentum as the European Union stalls over plans for a Russian oil ban. 

A vote on the embargo requires unanimous support, which is so far not forthcoming, with Hungary, in particular, maintaining staunch opposition. Hungary is now holding out for a hand-out in the form of hundreds of millions of dollars, which is said will be necessary to realize a full ban on Russian oil without economic devastation. 

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