President Putin Demands Russian Gas Payments be Made in Rubles

Russian President Vladimir Putin threatened to cut off Russian gas to Europe if “unfriendly countries” don’t pay in rubles, the Russian currency, by Friday.

“If unfriendly countries do not pay in rubles from April 1, we will consider this a default on gas contracts, in which case existing contracts will be stopped,” Putin stated on Thursday.

“Unfriendly countries” are those which have condemned Russia’s invasion of Ukraine, particularly the U.S., U.K., and members of the European Union.

Russia is the largest exporter of gas in the world, and almost half of its exports go to Europe.

Russia demands gas payments be made in rubles

While Russian oil and gas only makes up a small percentage of imports for the U.S., which has already banned it, it is vital to much of Europe.

Specifying that countries that depend on Russian gas must pay in rubles is an attempt at reversing some of the devastating economic impacts sanctions have had on the country.

The value of the ruble fell to extremely low levels in response to sanctions leveled at Russia and in response to the war in Ukraine.

The stipulation that payment for Russian exports should be in rubles may not only apply to gas but also to other goods such as oil, fertilizer, coal, and grain.

Germany, which receives 40% of its gas supply from Russia, has warned its citizens that, due to Putin’s decision, the country may have to ration gas.

While rationing gas rather than paying in rubles would severely damage the German economy, it would also inhibit Russia from getting around sanctions.

As of early 2022, over half of all sales of Russian gas were conducted in euros, and nearly 40% in U.S. dollars.

Greece is working to reduce dependency on Russian energy imports. In early March, Mitsotakis stated to Parliament: ” We cannot rule out attempts by Russia to blackmail. We all realize this… will disrupt global supplies and probably trigger a further rise in (energy) prices.”

As Greece imported 33% of its gas supplies from Russia in January, Athens called on the E.U. to support member-states and businesses against a further rise in energy costs.

Mitsotakis assured Parliament, saying that his government is prepared for a “worst-case scenario where gas supplies from Russia are halted,” as its liquefied natural gas (LNG) storage facility at Revythousa near Athens has been recently replenished.

“We are strengthening the diversification of our resources. In January, Greece covered 47% of domestic demand with LNG from Revythousa and 20% through the TAP pipeline,” Mitsotakis revealed.

Putin insists on the surrender of Ukraine forces in Mariupol

On Tuesday, Putin rejected the initiative by Greece, France, and Turkey to send a humanitarian mission to the besieged city of Mariupol in Ukraine.

Following a telephone conversation with Putin, the office of French President Emmanuel Macron said that the operation was not possible “at this stage.”

The one-hour-long call ended without a conclusion, his office said. Putin reportedly told Macron that Ukrainian forces fighting in Mariupol would have to surrender before humanitarian aid could be dispatched.

Last week, Macron said that France was ready to lead a humanitarian operation along with Greece and Turkey. “There was a concrete discussion today with the Mayor of Mariupol. We are coordinating,. .and we will then negotiate with the Russians,” Macron told reporters after an EU summit in Brussels on Friday.

Greek government sources said that Macron discussed the initiative with Greek PM Kyriakos Mitsotakis on the margins of the EU Summit. Greece has a special interest in Mariupol as tens of thousands of ethnic Greeks live in the area.

Prior to the meeting, at the NATO leaders’ meeting, Mitsotakis referred to the tragedy of Mariupol, which he said has “almost [been] wiped off the map.”