Moscow’s demand for all unfriendly countries to pay in roubles when buying its oil and gas could breach supply contracts, leaders from some European Union member states warned on Thursday.
The unfriendly countries include all 27 EU members after their decision, along with other foreign nations, to freeze Russia’s assets, hence destroying Moscow’s trust.
Russian demand on Wednesday pushed gas prices in Europe – which gets about 40% of its gas from Russia- high up and additionally increased concerns over oil and gas supply disruptions in the EU and some countries could end up hit harder than others
Europe’s biggest economy and energy consumer, Germany, for example, receives 18% of Russia’s gas exports and 11% of its oil, but German chancellor Olaf Scholz stressed that the currency German companies must pay for Russian fuels is fixed in their contracts.
Scholz noted on his arrival to an EU summit in Brussels on Thursday that the currency in which the deliveries are to be paid in most cases is euros or dollars. Italian Prime Minister Mario Draghi echoed Scholz’s statement pointing out that it is important to understand that the move may breach energy supply contracts.
Underscoring that the time when energy could be used to blackmail EU is over, European Commission President Ursula von der Leyen said Putin’s move is an attempt to circumvent EU-imposed sanctions against Russia.
Slovenia’s Prime Minister Janez Jansa was most adamant in saying that nobody will pay in roubles.
Putin’s speech lifted the Russian currency, which has plummeted since the February 24 invasion, 9% against the dollar on Wednesday and the hope is that his decision on the payments would additionally shore up the rouble.
Analysts argue that payments in roubles are possible without breaking EU sanctions since they do not directly hit oil and gas supplies but banks that could be involved in rouble transactions.
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