Topline
Italian energy firm Eni is preparing to set up an account in Gazprombank to make ruble payments for Russian gas, Bloomberg reported on Thursday, after the European Union criticized Russia’s decision to shut off gas supplies to Poland and Bulgaria as “blackmail,” and warned companies against breaching sanctions by complying with Russia’s demands.
Pipes are seen at the gas transmission point in Rembelszczyzna near Warsaw.
AFP via Getty Images
Key Facts
According to Bloomberg, Eni’s decision to open a ruble account with a Russian bank is a “precautionary measure” which could allow it to comply with Russian President’s Vladimir Putin’s demands that “unfriendly nations” pay for gas using Russian currency.
Companies in Europe are seeking more direction from European Union authorities on the issue but the report adds that another major purchaser of Russian gas, Germany’s Uniper, believes it can continue to purchase Russian gas without breaking any rules.
European Commission President Ursula von der Leyen accused Russia of using fossil fuels to “blackmail” EU nations and said the Kremlin’s actions to cut off supply to Poland and Bulgaria “failed” to create divisions in the bloc.
Von der Leyen also warned European companies against bending to Russia’s payment demands, noting that it would be a “breach of sanctions” and pose a risk to the companies.
The confusion around the issue has reportedly prompted several member nations to seek more clarity from the EU on dealing with Russia’s demand to pay in rubles, believing that the current advice is too ambiguous.
Poland and Bulgaria have told the EU they have alternative supply arrangements in place and the move does not yet pose a threat to their economies.
Forbes reached out to Eni for a statement but the company said it does not have a comment on “the rumor.”
Crucial Quote
Responding to Russia’s decision to cut gas supplies to Poland and Bulgaria Wednesday, von der Leyen said in a statement: “It comes as no surprise that the Kremlin uses fossil fuels to try to blackmail us…Today, the Kremlin failed once again in this attempt to sow division between Europeans. The era of Russian fossil fuels in Europe will come to an end.”
Key Background
On Wednesday, Russian energy giant Gazprom shut down all gas supplies to Poland and Bulgaria after the two nations failed to pay for the gas in rubles, as per the Kremlin’s demands. In its statement announcing the disconnection of supply, Gazprom said it had not received any payments from Poland and Bulgaria’s state-run gas companies since April 1. The Russian company also threatened to cut off supplies further if Poland or Bulgaria tap into supplies meant for other nations. The European union vowed that it would respond to this move by Gazprom in an “immediate, united and coordinated” manner.
Further Reading
Russia’s Gazprom Cuts Gas Supplies To Poland And Bulgaria (Forbes)
Eni Moves to Open Ruble Accounts as EU’s Unity Starts to Fray (Bloomberg)
EU Tells Gas Companies Not to Bend to Russia’s Demand for Rubles (Bloomberg)
