“We’re confused.” How did the West react to Russia’s decision to sell gas for rubles?

On the afternoon of March 23, Putin announced that Russia has changed the gas supply terms. He explained that the changes will only affect the currency that Russia accepts in exchange for gas. Supply volumes and pricing principles will remain the same. The transfer of the disclosed settlements to the ruble will only affect the pipeline gas supply, excluding liquefied natural gas (LNG) sales.

“Unlike some of our colleagues, we value our reputation as a reliable partner and supplier. Changes will only affect the payment currency,” he said.

Putin explained that in the current environment it is “nonsense” for Russia to supply its goods to the EU and the USA in dollars and euros. The president noted that these currencies “reconciled” themselves.

He asked the government to instruct Gazprom to amend existing contracts. The Bank of Russia, together with the government, should determine within a week how foreign consumers will buy rubles in the Russian domestic market to pay payments.

German response

Timm Köhler, head of the Zukunft Gas industry association, said the German gas industry was stunned by Putin’s statement. “We received with great confusion the message that Russia wants to pay only in rubles for its gas supply. “We cannot yet predict what specific implications this will have for the gas trade,” he said.

Susanne Ungrad, spokesperson for the German Ministry of Economic Affairs and Climate Protection, said such a move could be considered a violation of already signed agreements, as they usually deal with transactions in euros. “We will control the process and discuss with our partners, including at EU level,” Ungrad said.

German Economy and Climate Minister Robert Habeck also said that Russia’s decision violated existing contracts and that Germany would discuss this with European partners.

This proves once again that Russia is not a stable partner. [в вопросе поставок энергоносителей]’ said the minister.

Klaus Ernst, chairman of the Bundestag’s energy and climate protection committee, said that it is technically possible to pay for gas in rubles, but this would force the EU to bypass its own sanctions. “From the point of view of Russia, this is fit for purpose. Decision [президента России Владимира] Putin would force countries on the list of “unfriendly states” to circumvent the sanctions measures taken. “This could further fuel the debate about the boycott of Russian energy carriers,” he said.

Austrian response

Austrian oil and gas company OMV has announced that it will continue to pay for Russian gas in euros. “I also saw the message in the media. No one has called us yet and we have valid contracts, nothing like that was stipulated there. “Now I will wait to see if anyone can contact us.”

When asked whether the company would continue to pay Russia in euros, Stern replied: “Of course. We have no other contractual basis, I cannot do otherwise.”

japanese response

Finance Minister Shun’ichi Suzuki said Japanese officials still do not understand how Russia’s decision will be implemented. “At the moment we are examining the situation with the relevant units, as we do not have an understanding of what the Russian side’s intention is and how it will be implemented,” he said.

Suzuki added that the Japanese government is currently “meeting with responsible ministries and agencies to assess the situation.”

We plan to continue to engage with G7 countries and the international community so that Russia pays a high price for its actions. “However, we also want to assess the potential impact of the economic sanctions against Russia on the Japanese economy and financial markets in order to respond in a timely manner.”

italian response

The economic adviser to Italian Prime Minister Francesco Javazzi said Russia is trying to circumvent Western sanctions. “My opinion is that you should pay in euros, because paying in rubles means circumventing sanctions, so I think we will continue to pay in euros,” he insists.

At the same time, the consultant stated that the Italian government has not yet taken any decision.

Serbia’s response

Serbian President Aleksandar Vučić believes that converting payments for Russian gas into rubles raises “many difficult questions”. “Some people think it is genius to oppose petrodollars in a geopolitical game. [рублем] along with the yuan. The Germans have already said that this was the reason why the treaty was terminated. So I’m not sure about that, all this brings us new and new problems,” he said. He reminded that after Russia’s decision, gas prices increased by 25 percent.

Serbia is not on Russia’s list of hostile countries. However, neighboring Bulgaria is involved, and Serbia receives Russian gas through the Bulgarian gas transmission system. According to Vučić, neither Bulgaria nor Hungary, another Serbian neighbor, will pay for gas in rubles.

The Kremlin has promised to try to help Serbia if it has problems in this regard. “HE IS [президент Сербии Александар Вучич] true, this can be a really problematic situation, ”admitted the press secretary of the president of Russia Dmitry Peskov.

Peskov added that Bulgaria is hostile to Russia, therefore “whether it wants to or not, it will pay for natural gas in rubles”. But at the same time, this does not apply to Serbia. This is the problem that needs to be resolved and naturally Serbia’s concerns will be our top priority and priority.”

Bulgarian response

Bulgaria itself had previously said that it did not see any risk due to Russia’s decision. “There is a financial counterparty in Bulgaria that can trade in rubles. <...> A certain payment scenario will be evaluated by Bulgarian Energy Holding, there is no payment risk under the existing contracts,” said Alexander Nikolov, the country’s Minister of Energy.

Armenia’s reaction

Deputy Prime Minister Mher Grigoryan stated that his country is discussing the possibility of an agreement with Russia for natural gas in rubles. “I can’t promise that this issue will be resolved at this time, because there are objective preconditions, but still today this issue is already being discussed in the public sphere and will come up at some point,” he said.

Armenia is not on the list of hostile countries. Gazprom is the country’s sole gas supplier.

Moldova’s Response

Deputy Prime Minister Andrei Spinu said that Moldova does not see any problems with the possible transfer of payment for natural gas supplied by Russia to the ruble. “We have heard this statement. As we understand it, it does not apply to Moldova,” he said.

At the same time, the minister noted that even before the contracts signed between Moldovagaz and Gazprom, he provided payments in dollars, euros and Russian rubles. “Moldovagaz’s obligation is to pay in the current currency. No one can compel the Moldovan government or Moldovagaz to pay in a currency they do not own. This is stipulated in the contract,” Spinu explained.

The head of Moldovagaz, Vadim Cheban, said that part of the Russian gas consumed by the republic this week is paid in Russian rubles. He expressed the opinion that a possible transition to the Ruble will not affect the financial situation of the company. “We take rubles for Lei and transfer it in rubles. I don’t see any problems here,” said Cheban.

Poland’s response

Poland does not see an opportunity to pay for Russian gas in rubles.

“There is no such possibility,” Pavel Mayevsky, head of Polish oil and gas company PGNIG, said at a press conference.