War in Ukraine: EU prepares to disrupt Russian gas supplies

The European Union is refusing to pay for gas in Russia in rubles and must prepare for disruptions in its supplies, warned the European Commission and the French presidency of the Council after an emergency meeting of energy ministers of 27 countries in Brussels. Moscow’s request to pay for purchases in rubles is “a unilateral and unjustified change in contracts, and it is legitimate to reject it,” said Energy Commissioner Kadri Simson. “97% of contracts (concluded by European companies) specify the currency to be paid, and it is either the euro or the US dollar,” she said.

Kadri Simson said he was unaware of the opening of ruble accounts. “Payments are scheduled for mid-May, and most companies will abide by the rules of the contract,” she said. French Environment Minister Barbara Pompili, president of the meeting, reaffirmed “readiness to respect contracts”. “We must prepare for the suspension of supplies,” the commissioner warned.

Several member states have asked for clarification on ruble payments through the opening of a special account, and Kadri Simson has promised “detailed clarifications to explain to companies what they can and cannot do.” Poland and Bulgaria paid for the purchase with the currency stipulated in their contracts with the Russian gas giant Gazprom, and refused to open a second account in rubles. In response, the Russian gas company suspended supplies, believing that payment had not been made.

“There are no immediate risks to supplies,” he said. “But we will not be able to replace 150 billion m3 of gas purchased in Russia with other sources. This is not sustainable,” she said. “We can handle the replacement of two-thirds of Russian gas supplies,” she said. Kadri Simson insisted on the need for member states to replenish their reserves, and Barbara Pompili stressed the need to “diversify the methods of electricity generation and heating.” “Europe needs to get rid of its dependence on Russian fossil fuels,” said Polish Minister Anna Moskova. “Our reserves will be 100% this winter,” she said. “American liquefied natural gas has begun to flow through Lithuania, and we will supply gas from Norway through Denmark,” she explained.

Completion of the oil embargo

The ministers also agreed to phase out purchases of Russian oil and oil products planned by the EU in order to exhaust European funding for the Kremlin’s war in Ukraine. But no decision has been made. “A new package of sanctions is being prepared, but it was not the topic of the meeting,” said Barbara Pompili. “We are working on a new package of sanctions,” Commissioner Simson confirmed. “A meeting of the board (all commissioners) will be held on the sidelines of the parliamentary session in Strasbourg on Tuesday, and President Ursula von der Leyen will clarify what has been accepted,” she said. .

The proposal “is finalized and will be adopted by the Commission on Tuesday,” a source in Europe told AFP. “I think the Commission will propose a sixth package of sanctions tomorrow (Tuesday), including the seizure of Russian oil,” said German Minister Robert Habeck. The proposal will be submitted to member states for adoption on Wednesday. “I don’t know if it will be possible before the weekend,” the German minister said. If the 27 agree on the measure, the cessation of purchases of oil and oil products from Russia will be gradual, within six to eight months, but with immediate measures, including a tax on tanker transportation, a European official said.

The EU has already imposed an embargo on Russian coal and closed its ports to Russian ships, except for the transportation of hydrocarbons. The main importers of fossil fuels from Russia (gas, crude oil, petroleum products and coal) are Germany, Italy, the Netherlands and France. Along with the energy component, “there will be other Russian banks that will leave Swift,” Foreign Minister Josep Borrell said during a visit to Panama on Monday. Several European diplomatic sources have pointed out this weekend that Russia’s most important bank, Oschadbank, which accounts for 37% of the market, should be excluded from Swift. This interbank system is an important cog in global finance that allows you to transfer transactions quickly and securely.