On Monday, the G7 countries agreed to refuse to pay Russian gas in rubles. Vladimir Putin’s spokesman threatens that Russia will not supply gas to Europe.
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According to Dmitry Peskov Kommersant this Tuesday. He states that Russia can not engage in “charity”.
Russia has previously demanded that buyers pay in rubles, something the G7 countries on Monday agreed to say no to.
“Payment in rubles is not acceptable, and we will ask the companies affected by this not to follow Putin’s demands,” said German Energy Minister Robert Habeck. Frankfurter Allgemeine Zeitung.
– Not charity
So now the Russians strike back:
– I do not know what will happen when they reject this opportunity. We definitely do not intend to engage in charity – to send gas to Western Europe for free. No payment – no gas, Putin spokesman Peskov said.
It was Putin himself who said in a televised intergovernmental conference that he had decided that all sales of gas to countries that are not “friendly” should be paid in Russian rubles.
If Western importers have to pay in rubles, then it will act as indirect support for the ruble, because buyers will then have to obtain rubles to buy gas. The exchange rate of the Russian currency has fallen sharply since Vladimir Putin announced the invasion of Ukraine.
– Not between countries
– There has been a fairly unison response from the EU countries that it is neither desirable nor in accordance with contracts to have to pay in rubles, says oil analyst Helge André Martinsen in DNB Markets.
– These are not contracts between countries, but between Gazprom and companies that buy this gas in Europe. These are, of course, contracts that are strictly regulated both in terms of payment method and currency. It is impossible for me to have a strong opinion on whether it is possible to make changes to the contracts, says Martinsen.
He says the market reacted by raising gas prices when Putin made his threat last week. Today’s statement from Peskov has not led to any further price increase.
– But the gas price is already very high. The market has priced in a geopolitical risk, says the oil analyst.
Russian gas is important both for Europe and for Russia.
- The EU is the world’s largest importer of gas – and 41 percent of this gas comes from Russia. Germany and Italy in particular are dependent on Russian gas.
- For Russia, revenues from the sale of gas and oil are very important.
Hard to replace
Several European countries say they want to become more independent of gas from Russia, but it is not easy:
“It is more difficult to replace gas, because we have these large pipelines that carry Russian gas to Europe,” energy policy analyst Ben McWilliams told BBC.
The European Commission has presented a plan to make Europe independent of Russian fossil energy well before 2030, starting with gas, in light of Russia’s invasion of Ukraine, it said in a Message from the commission.
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