EXPLAINER: What's behind Russia's natural gas cutoff?

Russia's Gazprom says it is halting natural gas supplies to Poland and Bulgaria, escalating tensions between the Kremlin and Europe over energy and Russia's invasion of Ukraine — and adding new urgency to plans to reduce and then end the continent's dependence on Russia as a supplier of oil and gas.

Here are key things to know about the natural gas situation in Europe:

WHAT DID RUSSIA DO?

State-controlled Russian energy giant Gazprom said it was cutting off Poland and Bulgaria because they refused to pay in Russian rubles, as President Vladimir Putin has demanded.

European leaders say natural gas contracts spell out payment in euros or dollars and that can't be suddenly changed by one side. Poland has taken long-term steps to insulate itself from a cutoff, such as building an import terminal for liquefied gas that comes by ship, and had planned to cancel its import deal with Gazprom at year end anyway. Bulgaria says it has enough gas for now.

Still, the open questions about what the change could mean have sent shudders through energy markets, raising uncertainty about whether natural gas could be cut off to other European countries and cause a major hit to the economy.

Putin warned of that possibility if countries don't pay for energy supplies in rubles. But Russia also relies on oil and gas sales to fund its government as sanctions have squeezed its financial system.

Under the new payment system, the Kremlin has said importers would have to establish an account in dollars or euros at Russia’s third-largest bank, Gazprombank, then a second account in rubles. The importer would pay the gas bill in euros or dollars and direct the bank to exchange the money for rubles.

European Commission President Ursula von der Leyen said Wednesday that paying in rubles violates EU...