equitieswatch
Tuesday, June 6, 2023
About us
Advertise
  • Home
  • Stock Market
  • Finance
  • Cryptocurrency
  • Commodities
No Result
View All Result
Equitieswatch.com
No Result
View All Result

Explainer-Russia wants gas payments in roubles. Will buyers make the switch? By Reuters

by equitieswatch
March 31, 2022
in Stock Market

YOU MAY ALSO LIKE

Mexico’s new airport gets boost from Panama’s Copa Airlines By Reuters

Honda and Sony Team Up to Tackle Tesla

2/2

© Reuters. FILE PHOTO: A model of the natural gas pipeline is placed on Russian rouble banknote and a flag in this illustration taken, March 23, 2022. REUTERS

2/2

By Nina Chestney

LONDON (Reuters) – President Vladimir Putin signed a decree on Thursday requiring foreign buyers to pay roubles for Russian gas from April 1 or see their contracts halted, a move described as “blackmail” by European states.

WHAT IS BEHIND THE CHANGE?

The move is in retaliaton against Western sanctions imposed on Russia over its invasion of Ukraine.

Moscow, which says it is conducting a “special military operation” in Ukraine, describes the Western measures as an economic war.

Getting Western countries to pay in roubles would blunt the impact of their curbs on Russia’s foreign reserves and boost the rouble.

So far this year, Europe has spent 200 million to 800 million euros ($880 million) a day on Russian gas, converting that into roubles would be a huge boost for it.

WHY DOES IT MATTER?

Europe is heavily reliant on Russia for its energy needs, with around 40% of its gas coming from the country. If Moscow decides to turn off the taps it could trigger supply shortages, factory closures and crippling energy costs across the region.

Germany, Europe’s largest economy, has already activiated an emergency plan which could mean power rationing if gas supplies get too low.

Dutch gas prices, the European benchmark, have already hit record highs this year on supply concerns, stoking inflation in the region and raising the risk of recession.[G/EU]

WILL FOREIGN BUYERS SWITCH TO ROUBLES?

So far, it looks unlikely, Western countries have said payment in roubles would breach contracts that can take months or more to renegotiate.

IF THEY DO SWITCH, HOW WOULD IT WORK?

Putin’s order makes Gazprombank the intermediary in the gas trade.

A foreign buyer is now obliged to transfer foreign currency to one special, so called “K”, account at the lender. Gazprombank would then buy roubles on behalf of the gas buyer to transfer roubles to another special “K” account, the order said.

Britain put Gazprombank on its list of banned entities earlier this month. It was not included in the EU’s order excluding some Russian banks from the SWIFT messaging system.

WHAT HAPPENS NEXT?

It’s unclear. Russia would have to physically halt gas flows to the European Union to force the issue.

In the meantime, the European Union may up the ante by putting curbs on Russian energy exports.

The European Commission is readying new sanctions against the Kremlin, EU sources told Reuters on Wednesday, with the magnitude of the new measures depending on Moscow’s stance on gas payments in roubles.

($1 = 0.9087 euros)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

ShareTweetPin

Search

No Result
View All Result

Recent News

Oil slips further on demand, financial market worries By Reuters

Oil Sinks Further Amid China Concerns, Weakened Economic Prospects By Investing.com

October 25, 2022
Gold Up, Set for Second Weekly Gain as Dollar Falls from 20-Year High By Investing.com

Gold Pressured Near $1,650, Copper Muted on Economic Fears By Investing.com

October 25, 2022
Explainer-What would be the impact of Russian oil sanctions in Europe? By Reuters

Oil prices edge higher as U.S. dollar eases By Reuters

October 25, 2022
Equitieswatch.com

Equitieswatch.com is your Stock Market, Finance, Forex, Cryptocurrency, Business, NFT News Website. We provide you with the latest breaking news and videos straight from the Business industry.

  • Home
  • About us
  • Contact
  • Privacy Policy

© 2022 www.equitieswatch.com

No Result
View All Result
  • Home
  • Stock Market
  • Finance
  • Cryptocurrency
  • Commodities

© 2022 www.equitieswatch.com