In a speech last night, the Russian President warned that unless European nations open up ruble accounts in Russian banks, Moscow would terminate its gas contracts. This is an escalation of his previous threats, where Putin warned he is prepared to stop all gas supply contracts with “unfriendly” nations if bills are not paid in Russian rubles.
Russia is trying to boost its economy after Western sanctions hit the nation hard, and has also stated that it wants to reduce its reliance on the US dollar after Western nations froze many valuable Russian assets abroad.
Countries like Germany, the bloc’s largest economy, could face severe shortages in the near future if Putin decides to cut gas supplies.
The EU is heavily dependent on Russian gas, relying on Moscow for 40 percent of its energy needs.
This has made the continent vulnerable to Putin’s influence, as he has squeezed gas supplies over the past year to apply political pressure on the bloc.
In the speech, Putin said: “Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”
Berlin, which relies on Russia for up to 55 percent of its gas, insisted that it would not be “blackmailed by Putin”.
Meanwhile, Prime Minister Boris Johnson’s spokesman has said that the UK will refuse to purchase commodities like gas in rubles.
This standoff between Putin and the rest of Europe takes place as EU and China host their first joint summit since June 2020.
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In the past year, China’s natural gas imports from Russia rose by a massive 50.5 percent, as the two countries deepen ties.
Meanwhile, Russia has also turned towards India, with Delhi being tipped to buy15 million barrels of oil from Moscow at discounted prices.
Ahead of the summit, a senior EU leader said that it will ask Chinese Premier Xi Jinping to use his influence to end the conflict in Ukraine.
They also warned that they will intend to leverage their deals with China, saying: “Do you want to jeopardize this strong economic relationship; do you want to endanger the stability and growth prospects of the global economy and your own country?”