Russia Not Cutting Off Gas Supply Yet, Buyers Have Weeks Before Paying in Rubles

Russia wants gas buyers to set up accounts with Gazprombank, where payments in foreign currency will be converted to rubles

The Kremlin said Friday that buyers of Russian natural gas still have time to work on paying Russia in rubles and said Moscow would not cut off its gas supply for now.

Russian President Vladimir Putin signed an order for “unfriendly” countries to pay for gas in Rubles starting Friday.

“I was asked a lot of questions whether this means that if there is no confirmation in roubles, then gas supplies will be cut off from April 1. No, it doesn’t,” Kremlin spokesman Dmitry Peskov said.

Under Putin’s plan, the buyers have to open a special account with Russia’s Gazprombank, so they can transfer foreign currency to the bank. Gazprombank would then purchase rubles on behalf of the buyer, which will be used for the gas deal.

The plan is possible because Gazprombank has not been targeted with sanctions as the Western measures have exemptions carved out for energy deals. The transactions made in rubles will protect the value of the Russian currency, which has already bounced back from the initial crash it took when Russia invaded Ukraine.

Peskov signaled that gas buyers still have a few weeks to comply with the order. “Payment for the actual deliveries that are going on now does not need to be made today. And it should be made somewhere at the end, in the second half of the month of April, or even at the beginning of May,” he said.

The EU has announced a plan to wean itself off Russian energy but is still incredibly reliant on it. Russian gas accounts for about 40% of the EU’s imports, and Europeans are preparing for gas rationing as the sanctions campaign against Russia continues to escalate.

Author: Dave DeCamp

Dave DeCamp is the news editor of Antiwar.com, follow him on Twitter @decampdave.