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One of the biggest economic worries in Europe around sanctioning Russia in response to the invasion

of Ukraine is that Russia could cut off Europe's natural gas supplies. The EU relies on Russia

for a significant percentage of its energy needs and there are no easy substitutes for

Russian oil and gas supplies if they are disrupted. So Russia is in a strong position, but

they do still need to sell to Europe. Russian oil and gas export revenues

made up roughly 43% of the Kremlin's federal budget between 2011 and 2020. This is revenue

that they can't afford to lose. They currently get $440 million per day from gas sales to Europe and have no easy way of rerouting this gas

to other markets due to the way the pipelines are set up. So both Europe and Russia are extremely

economically reliant on each other. Austria and Germany in particular rely very heavily on Russia for natural gas.

Turning off the taps for even a few days would cause havoc for these economies,

but doing this would inflict much greater economic damage on Russia,

as right now oil and gas exports make up almost the entire Russian economy. Germany and Austria do have

emergency plans in place to deal with such a situation and they are already in the early

warning phase, the first of three steps designed to prepare the country for a supply shortage.

In the final stage the governments would bring in gas rationing.

Earlier this week, I'm sure you heard Vladimir Putin announced a decree that unfriendly foreign

countries must start paying for natural gas supplies in roubles, otherwise they'll be cut off.

The way this new decree works is that buyers in countries

deemed hostile to Russia, which are basically all of the countries imposing economic sanctions on

them. I guess he could probably view Ukrainians as a bit hostile too. These countries are required

to open an account both in foreign currency

...