Explainer: Europe's jittery reaction to Putin's gas-cut threat sees it as bravado.

Reuters, LONDON/FRANKFURT, April 1 - According to European officials and commentators, Russian President Vladimir Putin's threat to shut off customers' access to gas unless they pay in roubles is more of a 'bluff' to deter more sanctions than a true threat to cease supplying energy.

On Friday, gas was flowing routinely to Europe, and some experts believe the new agreement will be largely the same as the old one, with only a minor boost for the ailing Russian currency.

Here's why Putin's gas ultimatum is regarded as hyperbole, at least for the time being.

WHERE DID IT ALL GO WRONG?

Europe's energy needs are significantly dependant on Russia, with roughly 40% of its gas coming from the country. As a result, shutting off the taps in Moscow might result in immediate shortages, factory closures, and devastating energy bills.

Contracts for gas are usually priced in euros or dollars, but Putin believes they should be paid in roubles.

Here's why Putin's gas ultimatum is regarded as hyperbole, at least for the time being.

WHERE DID IT ALL GO WRONG?

Europe's energy needs are significantly dependant on Russia, with roughly 40% of its gas coming from the country. As a result, shutting off the taps in Moscow might result in immediate shortages, factory closures, and devastating energy bills.

Contracts for gas are usually priced in euros or dollars, but Putin believes they should be paid in roubles. 

Gazprombank would then use that money to buy roubles, therefore bolstering the currency, a function traditionally performed by the Russian central bank, which has been hampered by the freeze of hundreds of billions of dollars in reserves in response to the war.

Many European officials and academics were perplexed by Putin's rouble demand, and much remains unexplained, making a final evaluation difficult.

Because gas bills are paid weeks after delivery, we won't know whether the new payment plan will work for a while. That implies any dispute - or gas cut - will take some time to occur, if at all.

On Friday, there was no indication of any impending disruptions. Two of the three main pipelines transporting Russian gas into Europe, Nord Stream 1 over the Baltic Sea and Nord Stream 2 through Ukraine, remained stable.

Flows through the other major route, the Yamal-Europe pipeline through Belarus, had shifted in the opposite direction, carrying gas from Germany to Poland, but this is not unusual.

IS IT A 'TEACUP IN A STORM?'

For the time being, it appears to be the case. Officials and experts in Europe believe it is primarily intended to protect Russian energy behemoth Gazprom from future sanctions; if Gazprombank collects the funds, Europe will be unable to sanction it without stopping gas supplies.

"Overall, not a lot would change," an Italian minister stated if Russia's decree to pay for gas in roubles remains unchanged.

According to Jeffrey Schott of the Peterson Institute of International Economics, "it amounts to a warning from Putin not to tighten banking sanctions any further."

It also wouldn't help the rouble much. Prior to the invasion, the Russian central bank demanded that the majority of the foreign currency generated by the gas be turned into roubles. It would now be necessary to convert everything into Russian rubles.

"What began as a magnificent plan has devolved into a teacup storm. It strengthens Gazprombank's defenses against sanctions by making it the primary recipient of money for gas "The Oxford Institute for Energy Studies' Jack Sharples expressed his thoughts.

Putin, according to one European official, requested the move to rouble payment to see who would agree. However, no one did.

"After the pushback, he's trying to figure out a way to declare victory while maintaining something resembling the status quo," the official explained.

ARE THE LIGHTS GOING TO TURN OFF?

As Russia fights back against what it deems a "economic war," energy exports are Putin's most formidable weapon. Officials and analysts in Europe are hesitant to say that his threats to cut off supplies are completely empty.

According to Dmitry Polevoy, an analyst at the Moscow-based brokerage Locko-Invest, doing so would affect Russia's Gazprom because it would struggle to transfer all European-bound gas to alternative purchasers.

Experts feel it is symbolically significant, and it has shaken German trust in Russia's reliability, prompting the country to take the unusual step of warning of possible rationing.

While one European Union official called Putin's threatened termination without payment in roubles a "bluff," he added that the full ramifications of his demands were unclear, and that a harder attitude could emerge in the coming days.