Russia said on Tuesday that it has scrapped the proposed South Stream gas pipeline as Bulgaria has not provided the necessary permissions. Russia would now make a gas hub on the Turkish-Greek border.

Ruble, the Russian currency, continued to trade weak and near the multi-year low it hit on Monday. USD/RUB had ended lower on Monday after trading at a record high of 53.80, but it is now at 51.20, off the previous close of 50.90.

Russian President Vladimir Putin blamed European opposition to the South Stream, a project by Gazprom, Russia's state-run gas giant. According to Russia, Europe has opposed the project only due to political reasons.

The pipeline, if made, would have run under the Black Sea to southern and central Europe, providing another transit route for Gazprom, which already has two routes in the north.

According to a BBC report, EU has been worried about the gas producer, which supplies 30% of Europe's gas, owning a pipe network.

The 930km South Stream project began in Bulgaria in October last year but was suspended in June after the European Commission said it may be breaking EU competition rules.

Russia's relations with the Eurozone was damaged by the crisis in Ukraine. The EU and the US have imposed sanctions on a number of Russian individuals and companies following Russia's intervention in Ukraine, but Gazprom has not been targeted.