Putin Signs Order Demanding Gas Payments in Roubles from Friday

Russian President Vladimir Putin signed an order that demands gas payments be paid in roubles beginning today. Putin also signaled that supplies to Europe could soon be halted, however, details of a deal have suggested that a shutdown of natural gas is unlikely, The Guardian reports.

Putin has indicated that he could rip up contracts to supply Europe with gas unless “unfriendly” countries stop refusing to pay in roubles. 

Putin made a televised appearance yesterday, in which he said that in order to buy Russian gas, countries need to open rouble accounts in Russian banks. He said that beginning April 1 — today — it is from these accounts that gas will be paid for. 

If countries do not make payments in roubles, he will see the lack of payment as a failure to comply with contract obligations. 

Europe has worried this week about a looming gas shutoff. The threat of a complete shutoff was reduced as details have emerged about a new deal. 

The new deal would appear to allow European buyers to continue to pay for gas in euros and dollars. 

Putin signed a decree yesterday that authorizes state-controlled Gazprombank to open accounts in foreign currencies and roubles for gas purchases. 

This means that European countries could pay in foreign currencies, and then authorize the bank to convert that currency into roubles, which would be the official currency to formally purchase the gas. 

This extremely convoluted scheme would let Putin save face in his game of chicken over gas and how it is paid for. 

Energy experts said they believe these are “mental gymnastics” to pretend that Russian didn’t cave on its threats to shut off gas to Europe. Experts have said that it was a bluff, and since Europe didn’t bit at it, this is a way to save face. 

G7 allied countries have refused to meet demands for gas payments in roubles.

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