Is Russia Desperate for Foreign Currencies? Putin Partially Lifts Decree Requiring Ruble-Only Payments for Natural Gas

It appears that Russia’s energy giant Gazprom might be having trouble finding buyers for its natural gas. Some “unfriendly” EU countries have accumulated substantial debt for gas supplies that they are failing to pay, prompting the state-owned energy provider to devise a payment plan settled in foreign currencies other than rubles.

Back in March, Russian President Vladimir Putin officially ordered European countries Moscow deems “unfriendly” to Russia to open bank accounts at Gazprombank and pay for their natural gas purchases in rubles rather than the currencies specified in the existing contracts. As promised, the countries failing to heed Putin’s decree— including Poland and Finland— had their supplies cut, with the president insisting his policy was necessary because Western leaders “canceled the confidence” in their currencies by imposing sanctions against Russia.

READ: Gazprom Threatens Total Energy Export Halt… Again

However, some of the unfriendly countries have accumulated millions of dollars in unpaid gas bills to Gazprom, after failing to make approved payment plans. Negotiations to discover payment solutions have been ineffective, prompting Gazprom to make new efforts to settle the outstanding debts. In a document published on the Russian government’s legal information website, Russian gas suppliers can now receive payments from EU countries in the foreign currencies specified in the original contracts.

As per the updated decree, the debt will be considered fully repaid and gas shipments will resume once the foreign gas buyer’s funds are deposited into a special bank account designed to receive such payments. However, it remains uncertain as to whether or not the proposed payment plan will be successful; some countries may not be able to settle their debt in full, nor will they be inclined to meet other requirements of the presidential decree.

Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.