EU asserts payments for Russian gas in rubles violate sanctions, warns buyers against it

Amid the ongoing war in Ukraine, the European Union (EU) has cautioned Russian gas buyers that converting payments into rubles could violate sanctions. Earlier on April 27, Russian gas company Gazprom halted supplies to Poland and Bulgaria after they refused to pay in rubles for gas, marking Moscow's toughest retaliation to mounting Western sanctions. Meanwhile, the Kremlin's demand for rubles is widely seen as a ploy to weaponize its gas supply and exploit legal flaws in EU sanctions imposed on Russia for its invasion of Ukraine, Euractiv reported. 

EU's Energy ministers from across the European Union are expected to convene a meeting on Monday, May 2, to examine the matter, which has divided member states about whether sanctions would be violated if they adopted Russia's mechanism. Russia has demanded that energy firms from "unfriendly countries" convert their gas payments to rubles at Gazprombank, a request that several EU members, including Germany, believe did not violate sanction regulations. 

"The payments will be made in euros and then transferred by Gazprombank into a so-called K account. That’s the path that we are taking, that’s the path that Europe has shown us, that is the path that’s compatible with sanctions," German Economy Minister Robert Habeck stated, as per Euractiv. Meanwhile, the European Commission, which designs EU sanctions, has warned that the transfer could be illegal, placing gas importers in jeopardy. EU spokesman Eric Mamer stated that if the contract requires payments to be made in euros or dollars, the company's obligation ends once the payment is made in euros or dollars. "If the payment takes place in rubles, then we are no longer talking about the agreed contract and we’re talking about a circumvention of the sanctions," he added. 

EU won't be able to replace Russian oil & gas in next 5 to 10 years: Russia

Earlier this month, Russian Deputy Prime Minister Alexander Novak claimed that the European Union will not be able to fully replace Russian oil and gas in the next 5 to 10 years. He also stated that this opinion is echoed by the significant players in the global energy market. The Deputy Prime Minister stressed that foreign energy corporations normally do not stop cooperating with Russia voluntarily, and Moscow believes that rationality will prevail in the long run. 

Image: AP