All of Russia’s big exports could soon be in rubles, Kremlin says

All of Russia's big exports could soon be in rubles, Kremlin says
  • Find rubles if you want Russian gas: lawmaker
  • Speaker: The West Should Pay Rubles For Oil, Grain And Metals
  • Germany warns of gas supply disruption
  • Russia will not demand the immediate change to the ruble for gas
  • Medvedev: Sanctions boomerang in the West

LONDON, March 30 (Reuters) – The Kremlin indicated on Wednesday that all of Russia’s energy and raw material exports could be priced in rubles, tightening President Vladimir Putin’s bid to make the West feel the pain of sanctions he imposed over the invasion of Ukraine.

With Russia’s economy facing its most serious crisis since the collapse of the Soviet Union in 1991, Putin on March 23 struck back at the West, ordering that Russian gas exports be paid for in rubles.

That move forced Germany, Europe’s largest economy, to declare an “early warning” on Wednesday that it could be headed for a supply emergency. Germany imported 55% of its gas from Russia last year.

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In the strongest sign yet that Russia may be preparing an even tougher response to Western sanctions, Russia’s top lawmaker suggested on Wednesday that almost all of Russia’s energy and raw material exports could soon be priced in rubles. .

Asked about parliament speaker Vyacheslav Volodin’s comments, Kremlin spokesman Dmitry Peskov said: “This is an idea that definitely needs to be worked on.”

“It is possible that it will be resolved,” Peskov said of the proposal.

Peskov said the US dollar’s role as a global reserve currency had already been affected, and a move to price Russia’s largest exports in rubles would be “in our interest and in the interest of our partners.”

Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom has no right to renegotiate contracts. Read more

“If you want gasoline, find rubles,” Volodin said in a post on Telegram. “In addition, it would be correct, where it is beneficial for our country, to expand the list of export products priced in rubles to include: fertilizers, cereals, edible oil, petroleum, coal, metals, wood, etc.”

RUBLE GAME

Russia exports several hundred billion dollars worth of natural gas to Europe each year. Euros account for 58% of Gazprom’s exports, US dollars 39% and sterling about 3%, according to the company.

Peskov said that Russia will give buyers time to switch to rubles. Read more

Still, exactly how the payments could be made remained unclear as of Wednesday. Russia is trying to boost the ruble and, in the long run, reduce the dollar’s dominance in global energy and commodity pricing.

To have any hope of achieving that, Russia would need help from China, the world’s second-largest economy.

“China is willing to work with Russia to bring Sino-Russian ties to a higher level in a new era under the guidance of the consensus reached by the heads of state,” Chinese Foreign Minister Wang Yi said. Read more

Russian Foreign Minister Sergei Lavrov says that Russia’s relations with China are at their strongest level.

‘BOOMERANG’ SANCTIONS

Russian officials have repeatedly said that the West’s attempt to isolate one of the world’s largest producers of natural resources is an irrational act of self-harm that will drive up prices for consumers and lead Europe and the United States to recession.

Russia says the sanctions, and in particular the freezing of around $300 billion in Russian central bank reserves, amount to a declaration of economic war.

Former President Dmitry Medvedev said the sanctions had once again undermined the economies of Europe and North America, driving up fuel and heating prices and eroding confidence in the dollar and euro.

“The world is waking up: confidence in reserve currencies is melting like morning mist,” Medvedev said. “Abandon the dollar and the euro as the world’s main reserves no longer seems like a fantasy.”

Medvedev said that “crazy politicians” in the West had sacrificed the interests of their taxpayers on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”

Russia has long sought to reduce dependence on the US currency, even though its main exports – oil, gas and metals – are priced in dollars on global markets.

Globally, the dollar is by far the most traded currency, followed by the euro, the yen and the pound sterling.

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Information from Guy Faulconbridge; Edited by Conor Humphries, Frank Jack Daniel and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

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