If Russia sells gas in rubles …
RussiaChina, Iran, other countries, the United States in global trade from time to time dollarscriticized the dominance of
Russia Presidents Vladimir Putin said yesterday, March 23 that, To “unfriendly” countries gas will be sold in rubles. Reuters is mostly European in this demand gas writes that it creates new obstacles for buyers. Europe gasreceives 40 percent from Russia. Gazprom has already been instructed to reconsider its contracts.
USA, Britain and Canada is the center of Russia bankina and announced sanctions on energy imports. The target began to occupy Ukraine on February 24 Russia is to hit the economy.
Russian accident according to rubles, may evade some of the financial sanctions. Rystad Energy, a consulting firm, sells almost all of Russia’s gas contracts in euros or the United States dollarsindicates that it is connected to i.
“Then there is no contract in the middle”
Ruble US since Russia began occupying Ukraine dollarsina snowhas lost 85 percent of its value. After Putin’s statement yesterday, he came to his senses.
According to lawyers, Russia cannot unilaterally change the terms of contracts. “Contracts are usually concluded between the two parties in US dollars or euros. If one of the parties says unilaterally that, ‘no, you have to pay for it now’, then there is no contract in the middle “ – From the Sydney Institute of Technology Tim Harkurt he says.
“It is not clear how serious this demand is.” – Professor of Law, University of Houston Suzan Sakmar says.
In Putin’s interests
After Putin’s announcement, only the ruble to the dollar snowThe exchange rate has not risen, and the wholesale price of gas in Europe has risen. Sakmar is looking for the main point here. “It will take a long time,” he said. In the meantime Putin can keep prices high. This is in his interests. “ He said.
Minister of Energy of Bulgaria Alexander Nikolov He said that a financial company in Sofia could conduct transactions in rubles.
“This scenario has been discussed, there is no risk of payments under the existing contract,” he said. – The Minister stressed.
Leading Vice President of Rystad Claudio Galimberti Russia considers it possible to prepare new contracts requiring payment in rubles. In this case, governments must either keep the ruble in central banks or buy it on the open market.
Impacts
As for long-term effects, Russia, China, Iran and other countries have from time to time criticized the dominance of the US dollar in global trade.
Payments for Russia in rubles to pay off foreign debt and increases pressure on ability to reduce imports, tightens economy, economist at Capital Economics Emerging Europe Liam Piç reports.
For the United States, the declining role of the dollar in global trade, the ruble, the yuan and an increase in the share of other currencies. This is the US debt in the long run and affects financial costs.