It turns out that substitutes for Russian gas are far and few in between after all, meaning that “unfriendly” importers have no choice but to heed Moscows requests and pay for the commodity in rubles.
Russian Deputy Prime Minister Alexander Novak on Friday said several buyers of natural gas have already made the switch to ruble-denominated payments, as confirmed by Reuters, after Moscow demanded that “hostile” nations towards Russia pay in the country’s domestic currency rather than euros or US dollars.
Russian President Vladimir Putin’s request was initially rejected by EU officials, which cited that it would violate the West’s sanctions against Russia. However, given Europe’s dependence on Russian oil and gas, coupled with lack of sizeable replacements, some importers have no other choice but to adhere to Moscow’s demands or risk have supplies cut.
Although Novak failed to disclose which specific countries are making the switch, Armenia’s Economy Minister Vagan Kerobyan revealed during an interview with Russian media RBC that the country has already made several payments for gas in rubles. Hungary, on the other hand, said it will continue to pay for supplies in euros via Gazprombank.
Information for this briefing was found via Reuters. 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.
