Russian President Vladimir Putin declared that Russia will only accept roubles from ‘unfriendly’ countries in response to sanctions imposed over the invasion of Ukraine.
“Russia will continue, of course, to supply natural gas in accordance with volumes and prices… fixed in previously concluded contracts,” he announced, adding that the sanctions had ‘destroyed Moscow’s trust.’
“The changes will only affect the currency of payment, which will be changed to Russian roubles.”
Putin said that the central bank and the government had one week to determine how to make these operations to the Russian currency. He also said that gas giant Gazprom would have to make changes to its contracts.
These changes may mean customers in Europe may be forced to renegotiate their agreements, which are mostly in euros. This may result in supply disruptions as discussions take place.
The list of ‘unfriendly’ countries includes the United States, European Union member states, South Korea, Canada, Singapore, Britain, Japan, Ukraine, and Switzerland. Negotiations with companies from these countries have to be approved first by a government commission.
“It’s pretty clear that it makes no sense for us to supply our goods to the European Union, to the US and receive payments in dollars, euros, other currencies,” Putin said in a televised address on Wednesday.
According to Gazprom, 58 percent of its sales of natural gas were settled in euros as of January 27. US dollars accounted for 39 percent and sterling 3 percent.
“An understandable and transparent procedure of making payments should be created for (all foreign buyers), including acquiring Russian roubles on our domestic currency market,” the Russian leader added.
Dutch and British wholesale gas prices jumped on Wednesday after the announcement as the European Union proposed legislation on minimum storage levels of gas.
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