[이데일리 고준혁 기자] Russia has announced that European countries will have to pay in rubles rather than euros when purchasing Russian natural gas. European countries are protesting, saying it is “a condition that is not in the contract”.
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Russian President Vladimir Putin said on the 23rd (local time) that “Western groups have lost all confidence in their own currency” and that European gas buyers must pay in rubles.
He added that “as soon as possible” these measures will be taken against “countries unfriendly” to Russia. He also argued that “it makes no sense to say that goods supplied from Russia are settled in their currency, the euro”.
The FT interpreted that President Putin’s intention was to restore the country’s currency, which had plummeted after the Ukraine war. The exchange rate of Russian currency recorded about 132 rubles per dollar on the 23rd, and then fell to 96 rubles on the same day, but compared to 76 rubles before the war, the value of the ruble has fallen significantly.
For the currency to rise again, demand must increase. To this end, European gas buyers are forced to use rubles. As gas prices are on an upward trend, there is a possibility that the demand for the ruble will increase further in the future. Dutch TTF natural gas futures used in Europe closed at 107 euros per megawatt-hour (MWh) on the same day, up 9% from the previous trading day. That price is six times higher than a year ago.
Europe, which relies heavily on Russian gas, is in chaos. Contrary to Russia’s position, it is because they feel the risk of using the ruble, whose value is unstable due to war. James Wadel, European gas adviser at consulting firm Energy Aspects, said Putin’s actions were “amidst Western sanctions, Russia is trying to completely ruin its gas contract.”
It is not easy for European countries to obtain the ruble right away, but President Putin said he would give it a week to consider the situation. European companies are protesting Putin’s actions.
Austrian petrochemical group OMV has stressed that it will continue to pay Russia for gas in euros. French utility Engie also said that the ruble payment option was not included in the original contract.