Russian President Vladimir Putin on Wednesday demanded that “unfriendly countries” use rubles to buy his country’s oil and gas — an announcement that sent energy prices further skyrocketing as markets continued to be pounded by his military’s onslaught Ukraine will be shaken.
Russia has been hit by crippling economic sanctions after launching a massive military campaign against Ukraine a month ago.
But efforts to isolate Russia economically are complicated by the fact that the European Union depends on Moscow for oil and natural gas, which it uses to heat homes in winter.
As the financial noose tightened and the European Union split over whether to sanction Russia’s energy sector, Putin hit back with a clear message: if you want our gas, buy our currency.
“Russia will, of course, continue to supply natural gas according to the quantities and prices stipulated in previously concluded contracts,” Putin told a televised meeting with senior government ministers.
“The changes concern only the payment currency, which will be changed to Russian rubles,” he said.
Russian gas accounts for about 40% of total European consumption and EU gas imports from Russia.
The possibility that a currency move could upset this trade sent some European wholesale gas prices up as much as 30% on Wednesday.
The ruble briefly jumped to a three-week high above 95 against the dollar and despite some gains stayed well below 100 after the shock announcement. The currency is down around 20% since Feb. 24.
“On the face of it, this appears to be an attempt to prop up the ruble by forcing gas buyers to buy the previously free-falling currency to pay,” Vinicius Romano, a senior analyst at consultancy Rystad Energy, told Reuters .
With postal wires
https://nypost.com/2022/03/23/putin-demands-unfriendly-countries-use-rubles-to-buy-russian-oil-gas/ Putin demands that ‘unfriendly countries’ use rubles to buy Russian oil and gas