Payment for Russian gas in rubles: what consequences for Russia, for the West? – Boursorama

The measure could artificially boost the ruble. But its implementation raises many practical questions. Vladimir Putin in Moscow, Russia, March 23, 2022. ( SPUTNIK / MIKHAIL KLIMENTYEV ) This is Moscow’s response to the sanctions imposed by Western countries after the invasion of Ukraine: Vladimir Putin has decided to ban “hostile countries” payment for Russian gas in dollars or euros. A measure that could profoundly change the hydrocarbon market in the long term, but with an uncertain result for Russia, believes energy specialist Nicolas Mazzucchi, researcher at the Foundation for Strategic Research (FRS), a French think tank. In addition to the fact that the decision risks being assimilated to a breach of contract, as several analysts and the German government pointed out on Wednesday, the difficulties relate to the fixing of the price and the choice of intermediary banks. • Is Vladimir Putin’s decision to prohibit Europeans from paying for hydrocarbons in dollars or euros surprising? – “It’s a bit like the Russian counter-sanctions that we expected, since it must be remembered that when in 2014, there was a component of sanctions against Russia, it had imposed counter- sanctions, particularly on issues of imports of processed European agricultural products, so somewhere, Russia is implementing its counter-sanctions and hitting where it hurts”. • What might be the consequences? – “If it works, two effects: it will artificially push up the rouble, since it will create demand for the rouble, affected by this Russian decision to start this war in Ukraine. Second interesting effect (for Russia), to from the moment we ‘de-dollarize’, in one way or another, it makes it possible to avoid all or part of the American sanctions which could be turned on the use of the dollar, since a large part of the extra -territoriality of American law is based on the dollar. By ‘de-dollarizing’, we are trying to remove from the American capacity for pressure. In relation to Iran, in particular, all that had been the capacity of the United States to to prevent Iran from trading, it had been to say ‘you are forbidden to trade in dollars.’ And as at present, in the oil and gas world, everything is done in dollars, by saying ‘now it’s no longer the dollar, it’s no longer the euro’, potentially, Moscow can hope to circumvent certain sanctities ions”. • Which French companies are affected by this decision? – “All those who are going to buy hydrocarbons directly in Russia. Until now, we had TotalEnergies, (the group) had announced the end of oil and petroleum products, but gas will remain… We have Engie , on gas, again, everything related to Nord Stream (of which it owns 9%).Until now, in a contract like Nord Stream, the gas volumes were denominated in dollars. 1,000 cubic meters The question is from the moment when Russia wants to set up a system which will be based on the use of the rouble, how is this amount in dollars converted into an amount in roubles, what value of reference we are going to take? (…) We will have to see how it will be put in place. What will be the reality of the implementation, will we have to go through specific banks? If so , these are banks that no longer necessarily have the capacity to be active on European territory, will it be necessary to r go through third countries? This may be case by case, each player may, if he wants to continue to trade in hydrocarbons with Russia, implement his own strategy and his own circuit, there will not necessarily be a single model”.