Russia has launched a counterattack on energy by shutting off the taps of Poland and Bulgaria as Europe accelerates on the front lines of oil sanctions, calling an emergency meeting of energy ministers in Brussels next Monday. Meanwhile, however, caution prevails among the gas importers of the various member states of the European Union and many, also in the face of the ambiguous indications from Brussels, would have decided to open the “K account” denominated in Russian currency with Gazprombank, the bank of the energy giant, which then taking care of the ruble conversion would charge the companies for the exchange costs, as required by the decree signed by Putin in late March in support of the country’s currency appreciation sought by Western sanctions. Indeed, in many EU countries, the Commission, which is already working on a new document, would have been asked to clarify the guidelines published at the end of last week in order not to feel that there was an escape route to circumvent EU sanctions.
The movements
According to Bloomberg, which cites sources close to Gazprom, the companies from four European countries have already paid off the transactions that have become due under the new procedure, and ten have now agreed to open the double account as a precautionary measure. Among them is Eni. No comments came from the state-controlled company. But the move was almost considered “mandatory”. Opening a current account in rubles does not entail automatic evasion of penalties. There is still no gas embargo. Gazprombank is also currently exempt from any kind of sanctions, including disconnection from the Swift information exchange system, which allows transactions between bank counterparties from different countries. However, this is a delicate step that will not be easy to complete. Eni will have to pay the next bills to Gazprom in the second half of May. If he receives requests to pay the bills in euros, he cannot refuse. Otherwise it would not meet its contractual obligations.
Eni, like the other companies that opened a K-account at Gazprombank, walks a very fine line. In the last few days, the European Commission has indeed published a synthetic Q&A, Questions and Answers, i.e. questions and answers about, how the energy companies of the Old Continent should react to Gazprom’s demands to open accounts in rubles. When asked whether opening an account denominated in Russian currency constituted a violation of the sanctions, the Commission said no. But on another issue he specified that contracts with Gazprombank must be executed in euros or dollars. It is not possible to pay in rubles.
The central point will therefore be the moment when the gas delivery is considered “paid” and the invoice sent by Gazprom is considered “paid”. If the time of payment coincides with the time of crediting the euro or dollar account, the contractual penalty would not be violated. On the other hand, if the payment is deemed to have been made with the conversion of the amounts into rubles on account K, there would be a clear violation of the sanctions. This is because Russia’s central bank, one of the first institutions to be hit by Western sanctions, could set the exchange rate, effectively fixing the price of gas while bolstering the ruble’s value. In short, the simple opening of the “K account” by European companies does not currently constitute a violation of the sanctions. On the contrary, it also avoids the possibility that Gazprom will in any way punish its colleagues from the old continent for breach of contract for non-compliance with the of Vladimir Putin could indict the decree issued at the end of March.
Care for
The main concern of European companies is to avoid the same fate as yesterday morning the Polish companies Pgnig and the Bulgarian Bulgartransgaz, which did not want to proceed with the opening of the K account, moreover, the one launched by Moscow smacks of the demonstration action: “It will be the treatment for those who refuse to pay in rubles,” warned Kremlin spokesman Dmitry Peskov. Countries ready to comply with Moscow’s dictate also include Hungary and Slovakia, while Austrian Chancellor Karl Nehammer yesterday denied reconstructions published by the Russian state agency Tass that even Vienna had already paid in rubles. “The blackmail of Moscow does not surprise us, we were prepared, it is a provocation and the answer will be immediate and unanimous,” was the reaction of EU Commission President Ursula von der Leyen from Brussels. “About 97 percent of all contracts expressly provide for payments in euros or dollars,” von der Leyen reminded, stressing that “companies should not accept the Russian request to pay in rubles because “it would constitute a violation of high-risk sanctions . “. The number one of the EU executive spoke after a meeting of the gas coordination group, which decided on solidarity and the sharing of stocks with Warsaw and Sofia by neighboring countries – from Romania to Greece: the first was already on the way to independence and received 50% of its needs from Russia, the second – where the situation is much more serious – 90% Poland and Bulgaria are also transit countries for Russian gas flows, but this would not pose a risk to supplies to final recipients, Gazprom clarified.
The consequences
Meanwhile, on the back of the fresh open gas conflict in Europe, methane price recorded +24% on the Dutch reference platform in the morning, which fell to a more modest +4% at the end of the day. Putin’s attempt, as a savvy gambler, to push gas prices back up is obvious. Also because the price increases would come just as European countries are busy restocking for the coming winter. In doing so, he wants to make it more difficult and, above all, more difficult for Europeans to build up the necessary supplies to guarantee heat and electricity next winter while they wait for Russian gas to be replaced by that of other suppliers.
Meanwhile, Brussels is working on the next package of sanctions, the sixth. That includes oil and will be formalized next week. After Germany announced two days ago that “an oil embargo has become manageable for us,” Germany is preparing to lift its veto on the package of measures affecting Moscow’s main source of income, oil — as it did with coal — to cushion the blow A transitional period is introduced to take account of the effects on German industry.
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