Russian Putin said last week that “unfriendly” nations would be called upon to pay for their gas in rubles – sparking a rise in gas prices in Europe. By demanding payments in Russian currency – instead of dollars or euros, as agreed – Putin is seeking to support the value of the ruble, which sank in the wake of Russia’s invasion of Ukraine. The US dollar has risen nearly 13 percent against the Russian ruble since February 24, when Russia began its invasion of Ukraine, after jumping about 85 percent in early March. However, German Finance Minister Christian Lindner said he would not be heavily armed by Russian demands. “We are completely against any kind of blackmail, these conditions are based on the euro and [U.S.] dollar and so we suggest private sector companies to pay [Russia] “in euros or dollars,” Lindner told CNBC’s Annette Weisbach on Monday. “If Putin is not willing to accept it, it is open to him to think about the consequences,” he added. German Chancellor Olaf Solz said last week that paying for oil in rubles would be a breach of contract, and Italian officials also said they would not pay in rubles as this would help Russia avoid Western sanctions for its invasion. in Ukraine. However, tensions over future payments could disrupt the continued flow of gas from Russia to Europe. The region receives about 40% of its gas imports from Russia, and this figure is even higher for some European nations, especially Hungary, which imported 95% of its 2020 gas imports from Russia. The region’s dependence on Russian energy has prevented the bloc from imposing an oil embargo on Moscow as part of a sanctions regime – in contrast to the White House, which has banned imports of Russian oil and gas. The European Union has said it will reconsider its approach to Russian energy and reduce its long-term dependence. A plan unveiled earlier this month proposed cutting Russian gas imports by two-thirds before the end of the year. “We will find solutions. We work for less dependence on Russian imports though [Putin] “If it decides to cut its supplies, we would have to be even faster to be independent of Russia,” Lindner said. The region is now trying to get its energy from elsewhere. The United States, for example, announced on Friday a new agreement with the European Union to supply the block with 15 billion cubic meters of liquefied natural gas this year.
