EU says paying for Russian gas in rubles would violate sanctions

The European Commission, the EU’s executive arm, has warned member states that paying for Russian gas in rubles would violate sanctions imposed on Moscow.

On March 31st, the Kremlin demanded that EU gas buyers open two accounts: one in foreign currency and one in rubles. Gazprombank would be responsible for converting the currency and transferring the ruble payment to Gazprom, the Russian state-owned energy corporation.

The European Commission has determined that such a situation alters the gas procurement procedure and creates a new legal scenario. Most European energy companies who purchase gas from Russia have long-term contracts with Russia denominated in Euros or dollars.

The Dutch government has meanwhile instructed energy companies in the Netherlands not to pay for Russian gas in rubles.

Meanwhile, Russian President Vladimir Putin said Thursday that “unfriendly” countries have failed to pay for oil and gas in rubles.

"Banks from these ‘unfriendly’ countries are delaying the transfer of payments,” Putin stated on Thursday. “In general, we intend to radically increase the share of payments in national currencies in the foreign trade system. Important steps in these directions are already being taken. And the key task here is to prepare our foreign exchange market for such a transition so that any foreign currency can be freely and in the required amount exchanged for Russian rubles.”

Most EU member states have said they will not pay for Russian gas in rubles. Germany affirmed this stance on Wednesday.

  Sanctions, Russian gas

Comments

Please visit out Twitter account for updates on the situation in Ukraine.