German newspaper Der Spiegel reported that Russian President Vladimir Putin asked the West to pay for gas in rubles in order to lift sanctions imposed by the West.
Most Russian gas contracts are paid by Europe in euros. But now Russia demands payment in rubles.
German magazine Der Spiegel quoted economist Jens Sudekum as saying that in order to buy Russian gas, the West must buy rubles from the Russian central bank.
Earlier this month, the Central Bank of Russia was one of the Russian banks added to a list of Russian banks banned from doing business with the West.
“Putin is forcing the West to ignore sanctions imposed by the West,” Sadkum said.
Klaus Jürgengern, an expert at Germany’s Kiel Institute for World Economics, said Russia’s move was “great pressure on the West” to impose sanctions on the risk of damage caused by sanctions.
40% of the West’s natural gas needs are now supplied by Russia. The West has vowed to reduce its reliance on Russian oil and gas, but that cannot be completely changed overnight.
Commenting on the German newspaper, currency expert Peter Bofinger said the Russian move was also aimed at boosting the value of the ruble. “If the West pays for gas in rubles instead of dollars or euros, the demand for Russian currency will increase, increasing the exchange value,” explained Bofinger.
Currently, Russia and the West are discussing mechanisms to switch to ruble payments. According to RT, in a worst-case scenario where the West does not accept payments in rubles, Russia could close the valve and stop gas supplies to Europe.