Putin is demanding gas importers pay Russia in rubles, twisting the West’s sanctions regime against itself:
Russian President Vladimir Putin is attempting to force the world to reengage with the Russian economy. On Wednesday, he ordered that gas contracts with "unfriendly" countries, those sanctioning Russia, be settled in rubles rather than in foreign currencies. Russia's central bank and gas suppliers like Gazprom have one week to implement the change. This is a significant change as about 58% of Gazprom's foreign gas sales were in euros and an additional 39% were in U.S. dollars in the third quarter of 2021. This may be intended as a way to put pressure on European countries, which get roughly 40% of their natural gas from Russia. The European Union has not banned Russian oil and gas, though it pledged to reduce Russian gas imports by two-thirds by the end of the year. Vinicius Romano, senior analyst for Rystad Energy, sees this as an attempt by Putin to prop up the ruble by forcing gas buyers to pay into “the previously free-falling currency.” These payments are a lifeline for the increasingly isolated economy, allowing the ruble’s value to increase to 25% below its value before the invasion of Ukraine up from its 40% crash. This may also be an attempt to work around existing sanctions by forcing the West to work with Russian entities if it wants to maintain its imports of Russian energy. It is currently unclear whether or not this ruse will work in Russia’s favor.
EU signs US gas deal to curb reliance on Russia:
