It has been claimed that four European gas buyers have paid for supplies in rubles, as demanded by President Vladimir Putin. According to a report published in Bloomberg, the revelation came from a person close to Russian gas giant Gazprom PJSC.
Although Europe is trying to maintain a united front, with the EU urging companies not to buy gas in rubles, some European companies are taking steps that would allow them to comply with Moscow’s new rules. Following the EU’s imposition of sanctions against Russia over the conflict in Ukraine, Moscow demanded that it be paid in Rubles for shipments beginning 1 April.
The EU responded by telling member states that the mechanism proposed by the Kremlin, which required opening euro and ruble accounts with state-controlled Gazprombank, would violate the sanctions.
The individual, who spoke to Bloomberg on the condition of anonymity, said that ten European companies have already opened the accounts at Gazprombank required to meet Russia’s payment demands. Several companies have said they will continue paying in euros, without setting out the mechanism clearly.
The revelation comes after supplies to Poland and Bulgaria were halted after they refused Gazprom’s proposed mechanism for ruble payments, which the gas giant claims does not violate European sanctions, according to the individual. Russia is the supplier of gas to 23 European countries via pipelines.
Ursula von der Leyen, European Commission President, urged companies not to comply with Russia’s demands to pay for gas in rubles, as Europe scrambles to respond to Russia’s move to begin cutting off supplies.
“Companies with such contracts should not accede to the Russian demands,” she said. “This would be a breach of the sanctions so a high risk for the companies.”
In a dramatic acceleration of the standoff between Russia and Ukraine’s European allies, Gazprom PJSC turned off the taps to Poland and Bulgaria on Wednesday. Meanwhile, Moscow was following through with a threat to turn off supplies if payments were not made in local currency. Attention now shifts to how Italy and Germany – the largest Economic buyers of Russian gas – will respond.
Russia is the biggest supplier of natural gas to Europe, and the country’s gas supply strategy has a major impact on energy prices in Ireland. Though Ireland does not get any gas supplies from Russia, any cut to the Russian supply in Europe would see wholesale prices soar.
Natural gas is a crucial fuel in Ireland, heating up to 700,000 homes and businesses and generating over half of our electricity. Ireland is supplied by a combination of domestic production from the Corrib field, meeting 30% of our gas needs, as well as imports supplied through two undersea pipelines from Scotland.