May 27, 2022

Russia Says Some Buyers Agreed To Rubles-For-Gas Payments


Tsvetana Paraskova

Some of Russia’s natural gas customers have agreed to pay in rubles for Russian gas, Deputy Prime Minister Alexander Novak said on Friday.

Last month, Vladimir Putin said that “unfriendly” nations should pay in rubles for natural gas.

Russia had set a March 31 deadline for the countries it considers “hostile”—including the United States, all EU member states, Switzerland, Canada, Norway, South Korea, Japan, and many others—to start paying in rubles for natural gas.

The EU has rejected Putin’s demands for payments in rubles, while Russia did not immediately cut off the gas supply to Europe after April 1, partly because it is dependent on revenues from gas and partly because payments for gas delivered after April 1 are not due until later this month or early May.  

The Kremlin has signaled the gas-for-rubles demand is just the beginning of a switch to the Russian currency for Russian exports.

“We expect the decision [to switch to rubles] from other importers,” Novak was quoted by Reuters as saying at an energy ministry in-house magazine.

The Russian official, however, did not disclose which buyers had agreed to pay in rubles for gas.

Armenia, for example, has already started paying in rubles for Russian gas, Armenian Economy Minister Vahan Kerobyan told Russian outlet RBC in an interview published on Friday. According to the Armenian minister, the pricing of the gas is being made in U.S. dollars, but the actual payment is now being made in Russian rubles.

In the EU, Hungary—whose Prime Minister Viktor Orban has been in close ties with Putin for a decade—said last week that it was ready to pay in rubles for Russian natural gas. With comments from officials over the past week, Hungary has broken ranks with the EU, which has been seeking to present a unified front in the face of Putin’s demands for rubles for Russian gas.

By Tsvetana Paraskova for Oilprice.com

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