“No Roubles, No Oil,” Putin Says
Posted 4,April

By Chehan Jayasuriya

In International News

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Russian President Vladimir Putin signed a decree on the 1st of April stating that oil buyers “must open rouble accounts in Russian Banks.” 

“Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped,” the Russian president said.

The decree will compel foreign buyers of Russian gas to open accounts at Russia’s Gazprombank and transfer euros or US dollars to the said accounts. Gazprombank would then convert this into roubles, which will be used to make the payment for gas. The bank has been left sanctioned to ensure continuity of the energy trade.

The European Union depends on Russia for 40% of its gas and 30% of its oil, to which no reliable substitutes are present if supplies are disrupted.  Meanwhile, Russia at the present makes €400m (£340m) per day from gas sales to the EU and has no way of rerouting this supply to other markets.

The demand by Russia is seen as an attempt to boost the rouble, which has been hit by western sanctions.