Moscow demands payment in rubles in response to the sanctions imposed on Moscow by Western countries in connection with its war with Ukraine.
The sanctions froze a significant portion of Russia’s foreign exchange reserves and cut off its financial institutions from the international banking system. By insisting on ruble payments, Moscow is essentially forcing Europe to buy its own currency.
Gazprom’s announcement came just a day after Latvian energy company Latvijas Gaze announced it was buying gas from neighboring Russia, adding that it was not buying gas from Gazprom and was paying in euros.
Earlier this month, the Latvian parliament voted in favor of a proposal to ban Russian gas supplies from January 2023.
Meanwhile, earlier this month, Gazprom also drastically cut flows through the Nord Stream 1 pipeline, accusing the West of withholding vital equipment due to sanctions. Europe called Russia’s actions politically motivated.
The move prompted Germany to declare a “gas crisis” and activate the second phase of its three-phase gas emergency program, bringing it one step closer to rationing industrial supplies.
However, the bloc toned down its ambitions by giving the countries considerable leeway. The EU will exempt countries that are not connected to the gas networks of other members from the 15% target, as “they will not be able to release significant volumes of pipeline gas to other member states,” the EU Council said in a statement. Press release.