Russia Sets Midnight Deadline Over Gas Contracts

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Russia has told “unfriendly” foreign countries they must start paying for gas in roubles or it will cut supplies.

Vladimir Putin has signed a decree stating buyers “must open rouble accounts in Russian banks” from Friday.

“Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped,” the Russian president said.

Mr Putin’s demand is being seen as an attempt to boost the rouble, which has been hit by Western sanctions.

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Western companies and governments have rejected Russia’s demands to pay for gas in roubles as a breach of existing contracts, which are set in euros or US dollars.

Since Russia invaded Ukraine, Western nations have issued economic and trading sanctions on Russia, but the European Union has not placed bans on oil or gas, unlike the US and Canada, as its member nations rely heavily on it.

The EU gets about 40% of its gas and 30% of its oil from Russia, and has no easy substitutes if supplies are disrupted. Meanwhile, Russia currently gets €400m (£340m) per day from gas sales to the bloc and it has no way of rerouting this supply to other markets.

Mr Putin said the switch to roubles was meant to strengthen Russia’s sovereignty, and it would stick to its obligations on all contracts, if Western nations obliged.

Germany said the change announced by Mr Putin amounted to “blackmail”.

At a news conference, German Economy Minister Robert Habeck said he had not yet seen the new decree signed by Mr Putin.

“With regard to the threat, demand or consideration – one doesn’t know what to call it anymore – to be made to pay in roubles, it is crucial for us that the contracts are respected,” he said.

Separately, German Chancellor Olaf Scholz said German companies would continue to pay for Russian gas using euros as stipulated in contracts.

The order signed by Mr Putin means foreign buyers of Russian gas will have to open an account at Gazprombank and transfer euros or US dollars into it.

Gazprombank will then convert this into roubles which will then be used to make the payment for gas.

France’s economy minister Bruno Le Maire declined to comment on technical details linked to the latest Russian demands for rouble payment.

Analysts say making nations pay in roubles for gas will support the country’s currency, which fell sharply after the invasion but has begun to recover.

Nathan Piper, head of oil and gas research at Investec, said Mr Putin was attempting to put economic pressure “back on Europe” and that more foreign exchange demand for roubles would likely push up the value of the currency.

“However, long term Russia needs to remain a reliable supplier of gas so it is unclear if they would actually restrict gas supply,” he added.

“That said, even the risk of it is keeping UK/European gas prices at near record highs and six times the 10-year average. This is translating to steep rises in consumers’ energy bills.”
Source: BBC News
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Editorial Staff
Editorial Staff
Our Editorial Staff at St. Lucia Times is a team publishing news and other articles to over 200,000 regular monthly readers in Saint Lucia and in over 150 other countries worldwide.

6 COMMENTS

  1. Quite apart from this article from the BBC (British Bull$#!t Corporation), naught but part of the western information war (propaganda) against Russia, I’ve presented videos below to expose the up-to-date realities of the Ukraine situation:

    FOREIGN POLICY REVIEW — MEDIA LIES COST LIVES
    https://www.youtube.com/watch?v=_6QlFoh56KU

    Inflation skyrockets in EU, as Putin squeezes Olaf Scholz & Germany faces severe recession
    https://theduran.com/inflation-skyrockets-in-eu-as-putin-squeezes-olaf-scholz-germany-faces-severe-recession/

    Putin Decrees Gas for Rubles only, Energy Markets Tremble, Germany Shakes
    https://rumble.com/vz705b-putin-decrees-gas-for-roubles-only-energy-markets-tremble-germany-shakes.html

    Is Russia Changing Its Strategy? Richard Medhurst and Scott Ritter
    https://www.youtube.com/watch?v=n8Kt2p97VGE

  2. Later, I will provide links to support the Economist’s comment below, but Putin’s policies in reaction to US/EU sanctions have ushered immediate impact on calendars around the globe.

    It starts off this April 1, 2022, which will no longer be called April Fool’s Day, but will be changed to US/EU Fool’s Day!

    • The virtue-signaling clown car has gone completely off the road in Europe, targeting letters of the alphabet, now, in particular, the letter “Z” (apologies for defying the ban)! By all indications the comedian-in-chief of Ukraine, Zelensky, will have to change his name back to the original 卐elensky!

  3. “Mr Putin’s demand is being seen as an attempt to boost the rouble, which has been hit by Western sanctions.”

    The ruble is already at prewar levels. Not sure what rock you’ve been living under. This will make the ruble a reserve currency and the slow death of the USD.

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