Home of Lisa's Top Ten, the daily email that brings you the world.
Donate
SUBSCRIBE

Lisa's Top Ten

Putin’s Gas-for-Rubles Plan Set to Worsen EU Energy Crunch

The Russian president’s announcement that countries “unfriendly” to Moscow must pay for gas deliveries with rubles shows that he’s willing to use energy as a weapon in the Ukraine war. It puts the West in a tight spot.
Despite the Ukraine war, oil and gas have continued to flow because many countries have no alternative to Russian supplies
Despite the Ukraine war, oil and gas have continued to flow because many countries have no alternative to Russian supplies

With his demand for payments in the Russian currency, Vladimir Putin has dealt a surprise blow to Western countries still using large volumes of Russian gas for their energy needs.

The measure would apply to a total of 48 country’s deemed “hostile” and include the United States, the UK, and all members of the European Union, the Russian president said.

“I want to emphasize that Russia will definitely continue to supply natural gas in line with the volumes and prices and pricing mechanisms set forth in the existing contracts,” Putin added, according to a transcript published on the Kremlin website on Wednesday.

Germany, the biggest buyer of Russian gas, said the announcement on ruble payments is a breach of the contracts, and the nation will speak to its European partners on how to respond, Economy Minister Robert Habeck said.

Putin testing the West on sanctions

Putin ordered his government and the country’s central bank to flesh out the details and requirements for ruble payments. In addition, energy giant Gazprom was ordered to start working on needed amendments to current contracts.

Jens Südekum, a professor at the Institute for Competition Economics of Dusseldorf University in Germany, assumes Putin’s move could have been an “indirect reply” to German Chancellor Olaf Scholz’s recent remarks regarding Russian energy supplies.

“He [Chancellor Scholz] ruled out touching Russian gas deliveries because this would turn out to become too expensive for Germany,” Südekum told DW. Südekum, who is also a member of a panel of scientists advising the German government, said Putin’s reply probably is: “You want my gas? Then I set the terms.”

Südekum urged European governments “to say no to Putin’s plan,” stressing that it would be “a very weak signal” if the West gave in.

Read More

Total
14
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *