Putin no longer wants dollars and euros for Russian gas delivered to the EU

The Russian president is giving the Russian authorities a week to implement the new ruble system.

Vladimir Putin announced on Wednesday that Russia will no longer accept payments in dollars or euros for gas deliveries to the EU, giving Russian authorities a week to work out the new ruble system.

«I have made the decision to implement a set of measures to switch to payment in rubles for our gas delivered to hostile countries, and waive all regulations on currencies that have been compromised.the Russian president said during a government meeting, explaining that it was a reaction to the freezing of Russian assets in the West because of its offensive in Ukraine.

Other Russian exports may be affected

Vladimir Putin asked the central bank and the government to establish “within a week“the new system that should be”clear, transparent» and implies «the acquisition of rubles on the market» Russian Forex. This announcement had an immediate effect on the Russian currency, which strengthened against the euro and the dollar, whereas on February 24 it had collapsed with the entry of Russian forces into Ukraine.

He also hinted that other Russian exports would be affected as the West froze some $300 billion in Russian reserves abroad, a move Russian Foreign Minister Sergey Lavrov called “volume” Wednesday. “It is clear that delivering our merchandise to the EU, the US and receiving dollars, euros, other currencies, no longer makes sense to us.Vladimir Putin said.

For now, Russian hydrocarbons have largely been spared heavy Western sanctions against Russia. It is true that Washington has decreed an embargo on Russian oil and gas. But the latter continue to flow afloat towards Europe, highly dependent on Russian hydrocarbons and the first market for Moscow. But the European Union is now also considering an embargo on Russian oil.

Several decisive international summits are expected to suggest new Western sanctions. Moscow, for its part, has advocated for years the de-dollarization of its economy, in order to reduce its vulnerability to sanctions. In March 2019, the Russian public gas giant Gazprom announced its first sale of gas in rubles to a European company. “It is absolutely obvious that without Russian hydrocarbons, if sanctions are imposed, the oil and gas markets will collapse. Rising prices for energy resources can be unpredictable“said Alexandre Novak, deputy prime minister in charge of energy, on Wednesday.

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