Putin wants “unfriendly countries” to start paying for Russian gas in rubles
According to reports, the President of Russia has changed a clause in the contract that obliges all countries that have signed the gas import – to pay in Russian currency. “Provocative move – may aggravate sanctions”
Russian President Vladimir Putin said on Wednesday that Russia would insist that “unfriendly countries” pay for its ruble natural gas.
Vladimir Putin (Photo: Shutterstock)
The Russian president reportedly told his government officials that a number of Western countries had made “illegitimate decisions about the so-called freezing of Russian assets,” which he claimed led to “the unreliability of their currencies,” and undermined trust.
Putin added that it “would not make sense” to supply Russian goods to the EU and the United States, and to receive payment in euros, dollars and other currencies. However, according to reports, Putin said Russia would continue to supply natural gas in accordance with the volumes and prices set in previously concluded contracts.
European countries and the United States have imposed heavy sanctions on Russia since it invaded Ukraine a month ago. While Russia supplies about 40 percent of Europe’s natural gas, EU countries are largely dependent on Russian gas for heating and electricity generation, and the EU is divided on whether to impose sanctions on Russia’s energy sector.
But the union announced a few weeks ago a plan to reduce its dependence on Russia’s natural gas, at least for two – thirds of this year, and by the end of the decade to completely stop doing business with Russia on fossil fuels.
The Kremlin has published a list of countries it defines as “unfriendly” – including the United States, all EU member states, Britain, Japan, Canada, Norway, Singapore, South Korea, Switzerland, and of course Ukraine.
It is unclear whether Putin can indeed change the existing agreements and force the signatory countries to change the method of payment. It should be noted that EU gas imports from Russia range from 200 to 800 million euros per day.
The German economy minister called Putin’s demand a breach of contract. A senior Polish government official also attacked: “This would violate all payment rules included in the current contracts,” adding that Warsaw has no intention of signing new contracts after the existing deal expires at the end of the current year.
According to Gazprom, 58% of Russia’s natural gas sales were made in euros, 39% in US dollars and 3% in sterling.
Liam Fitch, a European economist, said that “the steps Russia is taking may be interpreted as provocative, and may increase the possibility that Western countries will tighten sanctions on Russian energy.”
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