Energy companies in Germany, Austria, Hungary and Slovakia are preparing to comply with a new payment system for Russian gas sought by the Kremlin, threatening the European Union’s (EU) unity and sanctions, the Financial Times (FT) reports, citing people with knowledge of the preparations.

Additional takeaways

“Negotiations between utilities and Gazprom, the Russian state-controlled gas supplier, have intensified as payment deadlines approach.”

“Italy’s Eni, another of Gazprom’s large customers, is evaluating its options.”

“The Rome-backed company has until the end of May, when its next payment for Russian supplies is due, to make a final call.”

“The preparations show the impact of Russian efforts to weaponize gas supplies and challenge the EU’s ability to maintain a united front against Moscow.”

Market reaction

EUR/USD is looking to break below 1.0500, under heavy pain from the relentless US dollar buying and EU-Russia energy crisis. The spot is down 0.41% on the day.