Putin Strikes Back on Sanctions and Demands EU Pay for Russian Gas in Rubles

European companies such as Engie, which buy Russian gas, are interested in having a good supply of rubles in their treasury. And a lot, even taking into account the massive purchases of gas from Russia, which continue. This Wednesday, Vladimir Putin announced that Russia would no longer accept payments in dollars or euros for gas supplies to the European Union, giving the Russian authorities a week to implement the new ruble system.

“I have decided to implement a set of measures to switch to paying for our gas supplied to hostile countries in rubles and to abandon compromised currencies in all regulations,” the Russian president said during the meeting. meeting of the government, explaining that it was a reaction to the freezing of Russian assets abroad, in particular the assets of the Russian central bank, whose foreign exchange reserves melted after Western sanctions imposed in connection with the Russian invasion of Ukraine.

The impact of this decision is likely to be heavy in the long run, given the scale of flows imported by European companies. According to the Center for Energy and Clean Air Research (Crea), the volume of flows between the Kremlin and Europe since the Russian invasion of Ukraine is 16.8 billion euros (i.e. 646 million per day). In detail: 10.6 billion euros for gas, 5.77 for oil (crude and refined) and 438 million euros for coal.

War in Ukraine: since the beginning of the conflict, Europe has bought Russian gas and oil for almost 17 billion euros

However, with huge pressure to stop buying Russian gas, European companies today are unable to free themselves from supplies from Russia. The latter account for 40% of EU imports. For Germany, this share even reaches 55%. A less dependent Washington has decided to ban the import of Russian hydrocarbons, while the UK has announced that it will stop importing Russian energy by the end of 2022.

Russian gas: why Europe is trapped

“We are not ready because it is impossible,” Richard Ferran, president of Emmanuel Macron’s campaign committee, told France Inter, adding that “the sanctions serve to influence the political power of Russia, they are not used to punishing the French or the French or other Europeans “.

“Every time we can harden our position in order to influence the Russian government, we should do it, but we are not talking about suddenly drying up Europe, France, industry, everything that makes us live,” he argued.

“There is no alternative answer if we decide that tomorrow or the day after tomorrow. That we are gradually moving towards reducing our supplies to such an extent that this will weaken Russia, yes, but it would not be fair to say: “tomorrow morning we will decide what,” he concluded.

But on March 11 in Versailles, after a two-day meeting with European leaders, Emmanuel Macron did not rule out that the EU could later attack gas or oil imports. “Nothing is forbidden, nothing is taboo,” he said.

This Wednesday on RTL, the day after the announcement of the cessation of purchases of Russian oil and/or oil products from TotalEnergies, the group’s CEO Patrick Pouyanne recalled that he could not do without Russian gas, without which part of the European economy would be “malfunction”.

New Western sanctions

Vladimir Putin’s remarks come as US President Joe Biden travels to Brussels today to discuss with European leaders Russia’s invasion of Ukraine and the application of new sanctions against Moscow, some of which may target members of the Russian parliament, according to people familiar with the matter.

Two sources said Joe Biden and his team are preparing new plans to impose sanctions against members of the Duma, the lower house of the Russian parliament. These measures are expected to be announced on Thursday.

War in Ukraine: Western countries will add new sanctions against Russia