Companies in the EU may have discovered a way to pay for Russian gas in rubles without violating sanctions, according to the European Commission on Friday. The companies would have to pay in euros or dollars, which would then be converted into rubles, but the transactions would also have to be accompanied by a declaration detailing how the companies believed their contractual responsibilities to be fulfilled once the euros or dollars were submitted.
Russia had set a March 31 deadline for “unfriendly” or “hostile” countries to begin paying for natural gas in rubles, despite the EU’s initial opposition, claiming that such a demand would be a breach of contract on Russia’s part and that paying in rubles would violate sanctions.
Russia then detailed the convoluted ruble-for-gas program. The countries would be unable to pay for gas using Gazprom’s foreign bank accounts under the arrangement since the cash would be subject to sanctions. Instead, these countries would have to pay in euros or dollars through a special account with Gazprombank, which would then convert the money into rubles. The sanctions-protected funds in rubles would then be available to Gazprom.
The commission’s declaration coincided with the White House’s announcement on Friday that the EU was resolved to block Russian oil and gas imports, despite Germany’s strong opposition to a comprehensive and immediate ban due to its major reliance on Russian energy supplies.