The European Union proposed a price cap on Russian gas on Wednesday hours after President Vladimir Putin threatened to halt all supplies if they took such a step, raising the risk of rationing in some of the world's richest countries this winter.
The escalating standoff threatens to send sky-high European gas prices higher still, adding to already eyewatering bills EU governments are paying to stop their energy providers collapsing and prevent cash-strapped customers freezing in the cold months ahead.
Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blames those sanctions for causing the gas supply problems, which it puts down to pipeline faults.
EU energy ministers are due to hold an emergency meeting on Friday to discuss how to tackle the energy crisis.
"We will propose a price cap on Russian gas... We must cut Russia's revenues which Putin uses to finance this atrocious war in Ukraine," European Commission President Ursula von der Leyen told reporters.
The Commission will also put forward other measures including a mandatory cut in electricity use during peak hours, and a cap on the revenues of energy generated from other sources.
Speaking earlier at an economic forum in Vladivostok, Putin anticipated the move, warning that supply contracts could be ripped up and warning the West it would be frozen like a wolf's tail in a famous Russian fairy tale.
"Will there be any political decisions that contradict the contracts? Yes, we just won't fulfil them. We will not supply anything at all if it contradicts our interests," Putin said.
"We will not supply gas, oil, coal, heating oil - we will not supply anything," Putin said.
Europe usually imports about 40% of its gas and 30% of its oil from Russia.
The Group of Seven (G7) wealthy democracies announced plans to impose a price cap on Russian oil exports last week in a move that could also restrict Russia's ability to secure tankers and insurance from countries beyond the G7.
