Russia will now demand that payments for Russian gas supplies that head to “unfriendly countries” must be settled in roubles, President Vladimir Putin announced during a government meeting, Interfax, a Russian news agency, reported Wednesday.
Putin called for the Russian central bank and government to determine within one week “the order of operations for the acquisition of roubles on the domestic market of the Russian Federation by buyers of Russian gas,” Interfax said.
The Russian premier added that his country would continue to provide gas in line with volumes and pricing principles previously set out in contracts, with only the payment currency changing.
Energy prices have skyrocketed in recent weeks following Russia’s invasion of Ukraine. In response to the invasion, Russia has been targeted by a record number of sanctions, including some bans on its energy exports. The rouble has tumbled to all-time lows as the economy has been hit hard by the sanctions.
Earlier on Wednesday, Russian Deputy Prime Minister Alexander Novak said that global energy markets would collapse if sanctions were placed on oil and gas from Russia, Reuters reported.
While the US and the UK have banned Russian energy, the European Union is much more reliant on Russia for its energy needs. EU chiefs have disagreed on how to proceed.
“Russia is the largest supplier, the share of Russian energy resources on global markets stands at around 40%. Obviously, oil and gas markets would collapse without Russian hydrocarbons in the event that sanctions were imposed,” Novak said, according to Reuters.
