By Arriana McLymore and Siddharth Cavale

NEW YORK – Target Corp is preparing to let shoppers use food stamps to pay for online orders, following in the footsteps of Walmart Inc and Amazon.com, in a move that could help the nation’s seventh-largest retailer gain market share among lower-income shoppers.

Roughly 21.7 million U.S. households use food stamps, which are mostly restricted payments to cold food items, non-alcoholic beverages and seeds and plants.

Target disclosed to Reuters last week that it will begin to accept payment online with food stamps, tentatively starting in late April, through a service offered by Shipt, its delivery arm. A Target spokesman said Thursday that it hadn’t “shared any official launch date” for the service, which also will include drive-up and pick-up orders.

Offering food-stamp payment for online orders could help Target fill a long-time gap in its e-commerce strategy and reach households that might otherwise purchase groceries at so-called “dollar store” chains, or at Walmart Inc.

Walmart and Amazon.com Inc already accept purchases with food stamps on their websites since 2019 as part of a program with the U.S. Department of Agriculture, which distributes food stamps. Grocery delivery service Instacart also offers the option.

Still, even though Target has lost the early mover advantage, investors and industry watchers were positive on the move. Accepting food-stamp payments online could build customer loyalty and help it sell other products, said David Klink, senior equity analyst at Huntington Private Bank, which holds over $30 million in Target shares.

“Target is kind of taking the long view, saying you can use your food stamps now,” he said. “But maybe at some point you won’t depend on food stamps and you’ll remember that Target was there for your various shopping needs.”

“I wouldn’t call it a game-changer, but I think it is important,” Klink added.

Grocery is a big part of Target’s operations. In 2020, it accounted for 20% of its overall sales of $92.4 billion, putting it in competition with the 10 largest U.S. grocers, including Kroger and Albertsons. The company this month said it was looking to expand grocery sales, especially through private label.

On March 1, Richard Gomez, Target’s chief food and beverage officer, told investors Target is “going to make our entire experience, in-store and online, accessible to all families, allowing them to shop on their terms regardless of how they pay for their groceries.”

Target’s house brand, Good & Gather, now offers nearly 2,500 food and beverage products. Target, for example, sells a 12-ounce can of Good & Gather evaporated milk for $0.99 on its website, compared to Nestle’s Carnation condensed milk for $1.69.

“Target will put a leading national brand like Nestle on a display, but put the Target (private-label) item right next to it, to get the consumer to cross over,” said Burt Flickinger, managing director at Strategic Resource Group, a consulting firm, adding that the move was “transformative.”

U.S. President Joe Biden’s administration in October began providing about 42.8 million people with an additional $20 billion in food stamps, through the Supplemental Nutrition Assistance Program (SNAP).

According to the United States Department of Agriculture, more than 3.2 million food-stamp households shopped online in January, doubling from a year before. To buy groceries online, food-stamp recipients generally must have an electronic benefits transfer (EBT) card, similar to a debit card. However card holders can’t use the benefits to pay for non-food items.

For Target, one question is whether food-stamp recipients will be willing to pay delivery fees. Shipt, which Target acquired in 2017, charges $7 per delivery but offers free same-day delivery to subscribers who pay $99 per year.

Instacart, which handles deliveries for BJ’s Wholesale Club, Food Lion, Publix and Ahold Delhaize USA, among others, is waiving its $3.99 delivery fees for food stamp purchases made online until March 31.

Amazon has since offered additional discounts of up to 15%on select meat, produce, toiletries and paper products purchased at Amazon Fresh or Whole Foods by food stamp recipients using EBT cards.

EBT cards can not be used to pay for Amazon Prime subscription membership, tips or items sold by third-party sellers; however, Amazon offers membership discounts of $6.99 per month for customers who are on government programs including SNAP (food stamps) and Medicaid. An Amazon Prime membership costs $14.99 per month, or $139 per year.

Lower-income households are seeing their purchasing power erode as meat and bread prices, and heating and gas costs, rise. The price of groceries purchased online in the United States rose 7.6% on average in February, compared to a year earlier, according to the Adobe Digital Economy Index.

The $50 billion or more that Americans spend annually on groceries purchased with food stamps represents just 5% of the $1 trillion spent on food-at-home yearly, said Bill Kirk, consumer analyst at MKM Partners.

Still, Target’s new payment option underscores its ambition to boost market share in the area of groceries, a category where strong growth in volume sales is hard to come by and where inflation is particularly acute.

(Reporting by Arriana McLymore in New York City and Siddharth Cavale in Bengaluru; Editing by Nick Zieminski)

By David Shepardson

WASHINGTON -A U.S. House of Representatives committee said on Wednesday it will hold an April 5 hearing on U.S. Postal Service (USPS) plans to purchase electric vehicles, where lawmakers expect to push for purchases of many more zero-emission delivery trucks.

Last week, USPS said it had placed an initial $2.98 billion order for 50,000 next-generation delivery vehicles from Oshkosh Corp. It said at least 10,019 of those will be electric vehicles (EVs), double its initial planned EV purchases, but some lawmakers feel that is not enough.

House Oversight Committee chair Carolyn Maloney said USPS “should be leading the way, not falling behind private companies that are already moving ahead to save money and curb climate change by electrifying their fleets.”

Previously, Postmaster General Louis DeJoy had committed to buying at least 10% EVs as part of a multibillion-dollar plan to retire 30-year-old delivery vehicles.

The hearing will include USPS Inspector General Tammy Whitcomb and Victoria Stephen, executive director of the USPS Next Generation Delivery Vehicle program.

Congress has considered awarding USPS $5.9 billion to boost EV purchases and charging infrastructure.

USPS in February rejected a bid by the White House and Environmental Protection Agency to reconsider its plans to buy mostly gasoline-powered vehicles and hold a new public hearing on the environmental ramifications of the vehicle purchases.

In February 2021, the USPS announced an initial $482 million contract for Oshkosh and said it could order up to 165,000 vehicles over 10 years in a deal that could be worth $6 billion or more.

USPS estimates its total costs for buying and operating 75,000 new delivery vehicles over 20 years including fueling and maintenance at $9.3 billion for gasoline-powered vehicles and $11.6 billion for electric models.

In 2019, USPS operated 217,000 vehicles that traveled approximately 1.2 billion miles and spent about $706.2 million in maintenance costs for it fleet of 140,000 older delivery vehicles.

USPS said its commitment to “an electric fleet remains ambitious given the pressing vehicle and safety needs of our aging fleet as well as our fragile financial condition.”

(Reporting by David Shepardson; Editing by David Gregorio)

By Nelson Bocanegra

BOGOTA – Colombia’s inflation figures will have registered another increase in March, taking them to nearly triple the central bank’s target rate and pressuring policymakers to further raise borrowing costs, a Reuters survey showed on Thursday.

According to the median estimate from 17 analysts, consumer prices will have increased 0.92% in March, compared to 0.51% in the same month last year and 1.63% in February.

Analysts estimates fluctuated between 0.71% and 1.10%.

If the median expectation is met, inflation will have accumulated 8.45% in the last 12 months, nearly three times the bank’s target rate of 3%.

“We are predicting an inflation peak at a level of 8.5% for between March and April and from there inflation should fall,” said Muni Jalil, head economist for the Andean region for BTG Pactual.

The government statistics agency will publish the figures on Tuesday.

Analysts estimates for inflation at the close of this year were up to 6.40%, from 5.50% in the previous survey at the end of February.

Expectations were also up for the end of next year, to 3.80% from 3.75% in the previous survey.

Those polled said inflation is likely to lead the central bank to increase borrowing costs to 5.50% on Thursday and to up to 8% by the end of this year.

Inflation is soaring in countries around the world, stoked by global supply-chain issues, the COVID-19 pandemic and Russia’s month-old invasion of Ukraine. In Colombia increases in domestic consumption and the minimum wage are also pushing up prices.

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Chris Reese)

By Nia Williams

CALGARY, Alberta -Canada’s first emissions reduction roadmap relies heavily on the oil and gas sector to help Ottawa reach its 2030 climate goal, but there is a still a big gap between what industry and government say are achievable cuts.

Oil and gas is Canada’s highest-polluting sector, accounting for 26% of total emissions. If Prime Minister Justin Trudeau’s Liberal government is to meet its climate target of reducing overall emissions 40%-45% below 2005 levels by 2030, the oil and gas industry will need to make drastic cuts.

So far, Canada has missed every emissions reduction goal it has set, with oil and gas pollution rising 19% between 2005 and 2019. Canada’s new Emissions Reduction Plan, announced on Tuesday, aims to cut oil and gas emissions by 42% from current levels by 2030.

“Ambition is one thing, action is what’s required,” Suncor Energy Chief Executive Officer Mark Little told a sustainability conference in Vancouver on Tuesday, adding that industry needed to work with government to align climate targets.

The Oil Sands Pathways to Net Zero Alliance, a group of six Canadian oil and gas companies including Suncor, is targeting a 32% cut by 2030. The alliance, which accounts for 90% of northern Alberta’s oil sands production, is aiming for net-zero emissions by 2050.

“The Pathways Alliance has been clear that the interim goals set for our industry must be flexible, realistic and achievable,” Kendall Dilling, the interim director of the group, said in a statement.

Trudeau’s government, which has had a strained relationship with the oil and gas industry since coming to power in 2015, is also developing an oil sands emissions cap as it promised in the last election campaign.

Natural Resources Minister Jonathan Wilkinson said he had spoken to the members of the alliance about the emissions reduction goal.

“What we have done is set some ambitious targets, and we’re going to sit down with the sector and work with them to ensure that we actually do have a plan and a pathway to achieving them,” Wilkinson said in a telephone interview.

HEAVY LIFT

Ottawa is relying on a handful of levers to slash oil and gas emissions, such as cutting methane output and embracing new technologies including carbon capture and storage (CCS), said Dave Sawyer, principal economist at the Canadian Climate Institute.

CCS involves capturing and permanently sequestering emissions underground, a costly process that the oil and gas sector wants public money to help fund. After months of negotiations Ottawa is expected to announce a CCS tax credit in the 2022 budget next week.

“Industry’s job is to keep costs down and transfer the risk from their shareholders to someone else, so there’s a discussion here around subsidizing emissions reductions,” Sawyer said.

That is despite a surge in cash flows from rising crude prices as Russia’s invasion of Ukraine disrupts global oil supplies.

Deborah Yedlin, the CEO of the Calgary Chamber of Commerce, a business lobby group in the heart of the oil patch, said high commodity prices were likely to be short-lived and accelerated climate targets would require more spending on commercial demonstration projects.

“Industry will therefore require government investment in technology through public-private partnerships,” Yedlin said.

Many environmental campaigners have accused the oil and gas industry of not doing its fair share. The sector is expected to cut emissions by 31% from 2005 levels by 2030, far less than the electricity sector’s 88% reduction, but still more than the transportation industry’s 11% cut.

“We need an all-hands-on-deck-approach to climate action, but according to this plan, some sectors – most notably oil and gas – will not contribute their fair share, letting the burden fall on workers, consumers, and other industries,” said Caroline Brouillette, national policy manager for Climate Action Network Canada.

($1 = 1.2498 Canadian dollars)

(Reporting by Nia Williams, additional reporting by Steve Scherer in OttawaEditing by Marguerita Choy and Paul Simao)

By Tina Bellon and Joseph White

(Reuters) -Automakers racing to develop battery-powered, software-driven vehicles to compete with Tesla Inc are confronting a new challenge: what technology to build themselves, and what to keep buying from suppliers.

Becoming more vertically integrated by doing more manufacturing in-house represents a major shift for most global automakers, who have relied for decades on suppliers to produce critical parts and software, and manage sprawling manufacturing networks in low-wage countries.

But some established automakers are embracing drastic changes to their longstanding build-or-buy calculations. One factor is the success of Tesla’s electric vehicles, which rely on proprietary technology the company develops and manufactures itself. Another is the financial damage done by supply-chain breakdowns during the pandemic.

“The most important thing is we vertically integrate. Henry Ford … was right,” Ford Motor Co’s CEO, Jim Farley, said at a conference in earlier this month. Farley’s reference was to company founder Henry Ford’s Rouge manufacturing complex in Dearborn, Michigan, which in the early 20th Century took in iron ore and other raw materials at one end, and churned Model Ts off the assembly line at the other.

Farley said the company had to move away from its early EV strategy of buying components off the shelf. Now, he said, Ford aims to control the supply chains “all the way back to the mines” that produce battery materials.

Graphic on share of in-house EV motor production: https://tmsnrt.rs/36KpTAj

Rivals including Volkswagen AG, General Motors Co and Mercedes-Benz AG are pursuing similar strategies. Mercedes last year acquired British high-performance electric motor manufacturer YASA, and has retooled a factory near Berlin to produce motors based on YASA technology. The German luxury car maker in March opened a new factory in Alabama to build battery packs for U.S.-made electric vehicles, and said it will partner with Japanese battery maker Envision AESC to build battery cells in the United States.

“We are going deep into sourcing,” Mercedes-Benz Chief Executive Ola Kaellenius told reporters during a briefing in Alabama.

WINNING STRATEGY

The investments by automakers in mines, motors and batteries are a departure from decades of handing control over development and production to suppliers, who could produce steering controls, semiconductors and electronic components at greater scale and lower cost for multiple vehicle manufacturers.

In the new world of electric vehicles, however, investors have decided that Tesla’s approach of buying raw materials directly, building its own batteries and engineering its own software is the winning strategy. Tesla’s market capitalization has soared back above $1 trillion in recent weeks, outweighing that of Toyota Motor Corp, Volkswagen, GM and Ford combined.

“Major players have realized electric vehicles are the future, but they have yet to widely recognize that they have to up their game in terms of motors, transmissions, battery technologies, inverters and electric powertrains,” Peter Rawlinson, CEO of EV startup Lucid Group Inc, said in an interview with Reuters. Rawlinson previously was vice president of vehicle engineering at Tesla.

Between the 1970s and the 2010s, the share of automaker-owned intellectual property in their vehicles decreased from 90% to 50%, according to Guidehouse Insights analyst Sam Abuelsamid.

That meant many automakers lacked the in-house engineering expertise to develop their own electric vehicle platforms, powertrains and battery packs when EV pioneer Tesla showed its vertically integrated cars were a hit with consumers.

“We’re designing and building so much more of the car than other OEMs who will largely go to the traditional supply base and [execute] like I call it, catalog engineering,” Tesla CEO Elon Musk said during a 2020 earnings call.

Tesla’s approach is costly and the company has raised vehicle prices repeatedly in the last few years. Despite promising to deliver a model that could start at about $25,000, Musk earlier this year said “we’re not currently working on the $25,000 car. At some point, we will. But we have enough on our plate right now.”

TECHNOLOGY RACE

There is also a gap between what automakers say about their vertical integration strategies, and what happens as engineers try to meet deadlines to deliver new vehicles, supplier industry executives said.

“There’s a lot of narrative about in-sourcing and vertically integrating, especially in areas like software,” Kevin Clark, chief executive of auto supplier Aptiv Plc, told analysts in February. “Virtually all the OEMs that we are doing business with are struggling with software development.”

Graphic on expected in-house EV motor production: https://tmsnrt.rs/3DAh0FC

Xavier Mosquet, a senior adviser at Boston Consulting Group, said many manufacturers still prefer to buy EV technology to avoid the cost and complexity of manufacturing in-house.

“There are a number of automakers who in a way want to continue buying and manage the final integration,” Mosquet said, adding that it would take several years to determine which approach is successful.

Many automakers are also hesitant to completely in-source EV manufacturing at a time when EV purchases still make up only a fraction of total vehicle demand.

Today, only Tesla, EV startup Lucid Group Inc and Chinese BYD Co Ltd are completely making their electric motors in-house, according to IHS Markit, followed by Hyundai Motor Co and the Renault-Nissan-Mitsubishi alliance.

Other carmakers, including Mercedes-Benz Group, Ford and Porsche, are using electric motors by suppliers for their current EV models.

“The electric powertrain cannot be bought off the shelf at a world-class standard, it is not a commodity,” Rawlinson said. “This is a technology race and the market doesn’t see it yet.”

Mercedes said it plans to make electric motors, battery packs and electronics in-house starting in 2024. The company is also working to reduce costs by securing raw materials directly from miners, Chief Technology Officer Markus Schaefer told Reuters.

(Reporting by Tina Bellon in Austin, Texas, and Joseph White in DetroitAdditional reporting by Ben Klayman in DetroitEditing by Matthew Lewis)

By Tim Hepher

BRUSSELS -The boss of Irish budget carrier Ryanair raised the stakes in a feud with Boeing over jet prices by saying he could do without a long-stalled deal to buy the 737 MAX 10 – even as Boeing appeared to woo his arch-rival easyJet.

The latest salvo in a dispute between Europe’s largest low-cost airline group and Boeing, the exclusive supplier of its main fleet, came as airline chiefs met for the first time in two years to review a pandemic recovery clouded by war in Ukraine.

Ryanair last year walked away from negotiations with Boeing for 200 of its largest type of single-aisle jet, the 737 MAX 10, accusing the planemaker of being “delusional” about prices.

On Thursday, Chief Executive Michael O’Leary noted no signs of a breakthrough but said he would meet Boeing in April.

“We have to wait for Boeing to be in a kind of headspace for talking about MAX 10s. At the moment, they’re dealing with a backlog of deliveries, 777 issues, design delays or certification delays on the MAX 10. They have a whole heap of problems,” O’Leary told Reuters.

“There are many times in my life that I missed the market, there’s always that possibility. But you know, even if we have, we’re very content where we are; we have 210 aircraft deliveries to take over the next five years,” he said in an interview.

Boeing officials had no immediate comment.

The U.S. company has said in response to previous criticism from Ryanair that it is committed to supporting its partner but will “continue to be disciplined” in commercial decisions.

O’Leary, hoping to benefit from bargain prices as Boeing claws its way back from a recent safety crisis, urged Boeing to fight harder for customers after what he described as a series of market losses to single-aisle leader Airbus.

“Boeing need to begin to fight back and win back market share from Airbus,” he said in an interview.

SHIFTING ALLIANCES

But in an unusual twist, Boeing wasted no time in holding a semi-public pow-wow with Ryanair’s rival easyJet, a key Airbus customer, just yards away at the A4E airlines conference.

EasyJet Chief Executive Johan Lundgren was seen huddling with a group of Boeing executives including Senior Vice-President of Commercial Sales & Marketing Ihssane Mounir, the U.S. company’s sales boss.

Mounir declined to comment on the half-hour discussion, held in the corner of a quiet public space on conference sidelines.

“As you would expect, we informally speak with others in the industry at industry events,” an easyJet spokeswoman said.

An Airbus spokesman said, “We have full trust in our partner easyJet and we never comment on our customers’ private agendas.”

It is not uncommon for airlines and manufacturers to chat informally at such gatherings, but the meeting between senior officials cutting across industry alliances caused a buzz.

“Yes, everyone noticed that,” a European delegate said.

Airbus has long been the exclusive supplier for easyJet, while Ryanair is a die-hard Boeing customer apart from a sub-fleet of leased Airbus jets inherited through acquisition.

The airline industry, hungry for new deals after pandemic losses, has seen a series of defections in recent months.

Boeing lost medium-haul contests to Airbus at Dutch KLM https://www.reuters.com/business/aerospace-defense/airbus-wins-dominant-share-air-france-klm-jet-purchase-sources-2021-12-16 and Australia’s Qantas https://www.reuters.com/business/aerospace-defense/airbus-wins-order-renew-qantas-fleet-sources-2021-12-15 but scored an unexpected victory by poaching U.S. budget carrier Allegiant Air, which had previously relied on used Airbus jets.

Such “flips” are rare due to the cost of retraining pilots, but reflect fierce competition for new business as the aerospace industry seeks to recover from its worst-ever recession.

(Reporting by Tim Hepher; Additional reporting by Kate Holton; editing by Jason Neely and Nick Macfie)

By Timothy Gardner

NEW YORK – President Joe Biden on Thursday will announce the release of a million barrels of crude oil every day for the next six months from the U.S. Strategic Petroleum Reserve to help cool oil prices, the largest such release from the stockpile in history.

The move is being undertaken because oil prices have spiked since Moscow’s invasion of Ukraine on Feb. 24 and subsequent sanctions slapped on Russia by the United States and its allies.

The latest amount of U.S. oil release would make 180 million barrels of oil available, or the equivalent to about two days of global demand, and would mark the third time the United States has tapped the SPR in the past six months.

It is also possible that the International Energy Agency, the world’s energy watchdog of which the United States is a member, may also release barrels when IEA countries meet on Friday.

The 31-member IEA, representing industrialized nations but not Russia, presided over the fourth coordinated oil release in its history on March 1 of over 60 million barrels of crude – its largest yet.

As part of the IEA’s March release, the United States committed to release 30 million barrels of SPR oil.

Before that, Washington pledged in November to release 50 million barrels of SPR oil, though an expected move in tandem from China did not materialize, as prices surged along with demand recovery for the COVID-19 pandemic.

WHY WAS THE SPR CREATED?

The United States created the SPR in 1975 after the Arab oilembargo spiked gasoline prices and damaged the U.S. economy.Presidents have tapped the stockpile to calm oil markets duringwar or when hurricanes hit oil infrastructure along the U.S.Gulf of Mexico.

HOW MUCH OIL DOES THE SPR HOLD?

The reserve currently holds about 586 million barrels indozens of caverns in four heavily guarded locations on theLouisiana and Texas coasts. The country also maintains small heating oil and gasoline reserves in the U.S. Northeast.

HOW DOES THE SPR GET OIL TO MARKET?

Because of its location near big U.S. refining orpetrochemical centers, the SPR can ship as much as 4.4 million barrels per day. It can take only 13 days from a presidential decision for the first oil to enter the U.S. market, according to the Energy Department.

Under a sale, the Energy Department usually holds an online auction in which energy companies bid on the oil. Under a swap, oil companies take crude but are required to return it, plusinterest.

Prior to the last six months, U.S. presidents have authorized emergency sales from the SPR three times, most recently in 2011 during a war in OPEC member Libya. Sales also took place during the Gulf War in 1991 and after Hurricane Katrina in 2005.

Oil swaps have taken place more frequently, with the lastexchange held in September after Hurricane Ida.

WHAT OTHER COUNTRIES HAVE STRATEGIC RESERVES?

The United States is responsible for about half of the world’s strategic petroleum reserves.

The United States and the other IEA member countries that include Britain, Germany, Japan and Australia are required to hold oil in emergency reserves equivalent to 90 days of net oil imports. Japan has one of the largest reserves after China and the United States.

China, an associate member of the IEA and the world’ssecond-leading oil consumer, created its SPR 15 years ago andheld its first oil reserve auction in September. Another IEA associate member, India, the third-biggest oil importer and consumer, also maintains a reserve.

State storage across the Organisation for Economic Cooperation and Development, most of whose members belong to IEA, came to nearly 1.2 billion barrels of crude as of January, according to the IEA.

(Reporting By Tim Gardner in Washington; Editing by David Gaffen and Marguerita Choy)

By Nina Chestney

LONDON – President Vladimir Putin signed a decree on Thursday requiring foreign buyers to pay roubles for Russian gas from April 1 or see their contracts halted, a move described as “blackmail” by European states.

WHAT IS BEHIND THE CHANGE?

The move is in retaliaton against Western sanctions imposed on Russia over its invasion of Ukraine.

Moscow, which says it is conducting a “special military operation” in Ukraine, describes the Western measures as an economic war.

Getting Western countries to pay in roubles would blunt the impact of their curbs on Russia’s foreign reserves and boost the rouble.

So far this year, Europe has spent 200 million to 800 million euros ($880 million) a day on Russian gas, converting that into roubles would be a huge boost for it.

WHY DOES IT MATTER?

Europe is heavily reliant on Russia for its energy needs, with around 40% of its gas coming from the country. If Moscow decides to turn off the taps it could trigger supply shortages, factory closures and crippling energy costs across the region.

Germany, Europe’s largest economy, has already activiated an emergency plan which could mean power rationing if gas supplies get too low.

Dutch gas prices, the European benchmark, have already hit record highs this year on supply concerns, stoking inflation in the region and raising the risk of recession.[G/EU]

WILL FOREIGN BUYERS SWITCH TO ROUBLES?

So far, it looks unlikely, Western countries have said payment in roubles would breach contracts that can take months or more to renegotiate.

IF THEY DO SWITCH, HOW WOULD IT WORK?

Putin’s order makes Gazprombank the intermediary in the gas trade.

A foreign buyer is now obliged to transfer foreign currency to one special, so called “K”, account at the lender. Gazprombank would then buy roubles on behalf of the gas buyer to transfer roubles to another special “K” account, the order said.

Britain put Gazprombank on its list of banned entities earlier this month. It was not included in the EU’s order excluding some Russian banks from the SWIFT messaging system.

WHAT HAPPENS NEXT?

It’s unclear. Russia would have to physically halt gas flows to the European Union to force the issue.

In the meantime, the European Union may up the ante by putting curbs on Russian energy exports.

The European Commission is readying new sanctions against the Kremlin, EU sources told Reuters on Wednesday, with the magnitude of the new measures depending on Moscow’s stance on gas payments in roubles.

($1 = 0.9087 euros)

(Reporting by Arathy Somasekhar in Houston and Nina Chestney in London; additional reporting by Paritosh Bansal in New York and Sujata Rao in London; Editing by Carmel Crimmins)