Russia will cut off the supply gas to countries that do not pay it in rubles. Tomorrow, Friday, April 1, the decree announced last week by the Russian president comes into force, Vladimir Putinwhich forces foreign buyers to use Russian currency and prohibits payment with euros or dollars.
“To buy Russian natural gas, they must open ruble accounts in russian banks. From these accounts, payments will be made for the gas delivered starting tomorrow,” Putin explained. “If these payments are not made, we will consider it a default by the buyers, with all the consequences that this entails. Nobody sells us anything for free, and we are not going to do charity either, that is, existing contracts will be suspended.”
The Russian leader announced on March 23 that he would restrict access to his gas in response to the economic sanctions that the European Union (EU), United States and its allies – countries considered “unfriendly” – have applied Moscow for his military invasion of Ukraine. With this strategy, Putin seeks to revive the value of the ruble, which in recent weeks has been devalued by up to 40%, in order to be able to face the payment of the Russian debt.
Dependence on Russian gas
However, Putin’s threat might not affect European countries. Germany reported this Wednesday that it had negotiated with the kremlin so that European countries could continue to pay in euros for the gas they purchase from Russia. “For European contract partners nothing will change,” explained the German government spokesman, Steffen Hebestreit. The German Chancellor, Olaf Scholzhas reiterated this Thursday that they will continue to pay for Russian gas in euros.
Putin’s decision is not trivial. 40% of the gas consumed in the EU comes from Russian sources, a figure that in countries like Germany shoots up to 80%. The pronounced energy dependence that a large part of the European nations have on Russia weakens their position vis-à-vis Moscow, especially in a context of tension and sanctions such as the current one. Faced with the threat of a possible supply cut, Berlin has activated a national gas emergency plan to try to limit that dependence. The Federal Minister for Economy and Climate Protection, Robert Habeckfears that next winter there may be supply problems that have not existed until now.
Aware of Russia’s position of power in the energy field, Speaker of the Russian Lower House, Vyacheslav Volodinproposed yesterday to extend the measure of restriction in the method of payment to other important fossil fuels such as Petroleum or the Coal and other merchandise such as fertilizers, grain, oil or wood.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.