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Updated March 28th, 2022 at 20:49 IST

Russia plans to replace gas contracts with EU with India and China amid Ukraine war

The dispute over Russian gas exports worsened between Kremlin and the German chancellor after the latter refused to pay for the Russian gas deliveries in rubles

Reported by: Zaini Majeed
Russia
Image: AP/PTI | Image:self
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Russia is planning to replace the European gas supply contracts with the ally countries of Southeast Asia, that includes India and China, Kremlin spokesman Dmitry Peskov told reporters on Monday, according to state-affiliated TASS. Responding to the earlier comments made by German Chancellor Olaf Scholz that Berlin will “completely abandon” coal and oil imports from Moscow, Peskov told reporters that only "some volumes will fall out" and Moscow will instead cater to the energy demands of its allies and partners in the East Asian region. 

The dispute over Russian gas exports worsened between Kremlin and the German chancellor after the latter refused to pay for the Russian gas deliveries in rubles. Moscow’s leader Vladimir Putin told “unfriendly countries” that effective March 31 Russia will only accept payment in its currency as the unprecedented Western sanctions depreciated the worth of the Ruble.

Berlin warns Moscow 'will scrap Russian gas imports very quickly'

At a Group of Seven (G7) press conference in Brussels, German chancellor Scholz dismissed the prospect of paying in Ruble, citing the contracts signed with Russian companies earlier that he asserted will make them “null and void.” As Russia did not budge from its initial announcement, Olaf noted that he will scrap the Russian gas imports “very quickly” hampering the major source of revenue for the Russian economy already suffering repercussions of the West’s crippling sanctions. 

When asked by a reporter on Monday how cutting off Russian gas completely by the EU might affect oil revenues Peskov said: "There is a market in Southeast Asia, in the east. Undoubtedly, falling out bids for oil will be compensated by bids from that Eastern direction.”

While he acknowledged that the EU’s ban might shrink the volume of exports, Peskov emphasised, "In any case, we repeat it once again, after all, the world market is much more multifaceted than only the European one. Although, of course, the European market is top-grade.”

"There can be some ‘slack’”, he said, “but, again, some compensatory mechanisms will be activated.” The United States also earlier announced 15 billion additional cubic meters of liquid natural gas (LNG) supply to the EU to cut the reliance on Russian energy.

India, which has largely remained neutral in its foreign policy in course of the Russia Ukraine conflict, had purchased its regular LNG shipment from Russian gas firm Gazprom, with which it had struck a 20-year contract in October last year 2021 to meet its massive demands. The western sanctions on Russian natural gas dipped the gas prices by default by over 29% for Indian oil firms, leading to a cut in the losses. In an act of "business as usual" India's private refiners Nayara Energy owned by Russia’s Rosneft, purchased an estimated 1.8 million barrels of Urals from Moscow.

India has chosen to largely remain an outsider in the West, Ukraine, and Russia's conflict implementing its own "non-foreign interference" policy as it shares strong ties with both Washington and Moscow much like the United Arab Emirates (UAE) which has also chosen to be one of the few countries to maintain a neutral stance in Russia Ukraine war. UAE presidential adviser Anwar Gargash on Twitter explained that the Gulf state “believes that taking sides would only lead to more violence and UAE’s priority is to encourage all parties to resort to diplomatic action”.

India was among the 13 members of the UN Security Council who abstained from holding Moscow directly accountable for the humanitarian crisis in Ukraine. Reports have also emerged that the independent oil refiners in Beijing's Shandong province, Russia's close ally in the Eastern bloc of the globe, haven't either shied away from purchasing Russian gas to meet the nation’s demands. 

Image: AP/PTI

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Published March 28th, 2022 at 20:49 IST

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