In response to the severe sanctions levied on Russia for a brutal attack on Ukraine, Russia now wants ‘unfriendly’ countries to purchase gas in roubles.
Russian President Vladimir Putin was very straightforward when he said, “Several countries took unlawful measures against Russia and this move has made their currencies less credible. So going forward unfriendly country seeking Russian gas has to buy in Roubles.”
European gas selling prices have increased by this statement and it would worsen the already troubled situation in Europe’s energy crisis. European wholesale gas was 30% higher and Dutch and British wholesale gas prices also saw a high.
Biden’s Government and his allies across the globe had levied severe sanctions on Putin’s Russia on February 24th for its brutal invasion in Ukraine. Europe completely forgot that it depends massively on Russian gas for their domestic and industrial purposes and now Europe is in a catch-22 whether to sanction Putin’s Russian gas vertical.
Putin’s directive was crystal clear “If you want gas, buy-in roubles.” However, it was not yet clear whether his directive held any effect on the previously agreed contracts in euros.
Soon after Putin’s announcement, Interestingly for short time, the Russian rouble had jumped to a 3-week rise stronger at 95 passing against the dollar. Rouble showed positive gains however, stayed below 100 and later It closed at 97.7 when compared to the dollar, less than 22% since 24th February.
Putin’s gas sector cater and capture Europe’s 40% of consumption. This year alone the EU saw a lot of fluctuation while importing Russian Gas from 200 million to 800 million euros per day.
Putin said in a ministerial meet that aired, “Russia will not back off from honouring the existing contracts with Gazprom of supplying natural gas in tandem with the previously agreed contracts both in volume and prices, just that the unfriendly countries now have to purchase in roubles.”