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The Period of ‘sales in Rubles’ of Russia’s Natural Gas to Non-friendly Countries Has Begun

According to the decree signed by Russian President Putin, countries that buy Russian gas will open an account with Gazprombank and make their payments to this bank.

Moscow

Russia’s announcement that it has switched to Russian rubles for payments for natural gas sales to unfriendly countries, while countries such as Germany and France refused to pay in rubles, created uncertainty in the energy markets.

Russian President Vladimir Putin signed the decree yesterday that his country will switch to Russian rubles for payments for natural gas sales to non-friendly countries.

  • Russian President Putin: Russian gas contracts will be stopped if payment is not made in rubles

According to the decree signed by Putin and published in the country’s legal information system, the new system for receiving payment in rubles for the sale of Russian gas to unfriendly countries has been activated as of today.

According to the decree, the relevant countries that buy Russian gas should open an account with Gazprombank, but after making the payments to this bank, the funds in question will be converted into rubles on the Moscow Stock Exchange.

In line with the aforementioned decree, it is foreseen that Western countries will continue to make their payments in foreign currency, but only the procedures will change as the payments must be made to the account to be opened at Gazprombank.

After signing the decree, Putin said that if unfriendly countries do not accept the new system, Russian gas contracts will be stopped.

Stating that Western countries use the financial system as a weapon, Putin said, “We provided our resources to European consumers and they paid us in euros, then they froze our resources. In this context, we delivered some of the gas to Europe for free. This of course cannot continue.” had used the words.

Some sources speaking to the Russian media reported that payments for most natural gas contracts will begin in the second half of April.

Germany and France refused to pay in rubles

The Russian government approved the list of “unfriendly” countries to Russia on March 7.

The approved list includes countries such as the USA, European Union countries, the United Kingdom, South Korea, Japan, Ukraine, Switzerland and Singapore, as well as 15 other countries that impose sanctions on Russia.

German Economy and Climate Protection Minister Robert Habeck told reporters after Putin’s statements yesterday that they were prepared for any scenario, including cutting off Russian gas.

French Economy Minister Bruno Le Maire also noted that after meeting with Habeck in Berlin, France and Germany refused to pay for Russian gas in rubles, and that they were making preparations for scenarios where Russian gas would no longer exist.

Italian Prime Minister Mario Draghi, on the other hand, stated that he did not think that Russian gas would be cut off at the press conference he held yesterday and said, “I do not think that Western countries are doing anything other than saying that it is unacceptable to pay in rubles.” commented.

European-based energy companies such as Eni and OMV also announced that Russia’s demand is against existing natural gas contracts and will continue to pay in euros.

On the other hand, Europe imports about 40 percent of the natural gas it consumes, in other words 175 billion cubic meters, from Russia.

Which Countries Are in Russia’s List of Unfriendly Countries? Is Turkey on the List?

Australia, Albania, Gibraltar, Micronesia, UK, EU countries, Iceland, Canada, New Zealand, Norway, South Korea, Singapore, Taiwan, Ukraine, Montenegro, Switzerland, Japan, North Macedonia, Monaco, San Marino, Liechtenstein and USA.

Why Is the Ruble Getting Stronger?

Russian President Vladimir Putin, who signed the decree on the sale of Russian gas to unfriendly countries in rubles, said that if these countries do not accept the payment terms, their natural contracts will be stopped.

Russian President Vladimir Putin signed the decree today on the receipt of gas payments from non-friendly countries in rubles.

Speaking at the meeting about the decision that will come into effect tomorrow, Putin said, “In order to purchase Russian natural gas, they need to open a ruble account in Russian banks. Payments for the delivered gas will be made from these accounts as of tomorrow. Failure to make such payments will be considered as default for the buyers and there will be consequences accordingly.

Nobody is selling us anything for free and we are not doing charity work. Existing gas supply contracts will be stopped if buyers from non-friendly countries do not comply with the new payment terms,” he said.

Erdem Artan

Hello, I'm Erdem, I write content for Expat Guide Turkey every day. Don't forget to check it out!

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