Last week, the Russian President sent shockwaves across the European Union after announcing that Russia would only accept rubles as a form of payment for supplying gas. This came as retaliation by Moscow for the sanctions placed by the EU for Putin’s invasion of Ukraine last month. The bloc is heavily reliant on Russian oil and gas, supplying around 40 percent of its gas needs.
However, on Wednesday Germany announced that it had reached what appeared to be a compromise with Russia and that they would not have to pay in rubles.
Mr Scholz said that Putin would now accept payments for gas in euros or dollars as usual.
The payment would be done to Gazprom bank, which has escaped sanctions due to the bloc’s reliance on the gas behemoth.
According to Berlin, the money would then be transferred to rubles in Russia.
However, Germany may be setting itself up for a major embarrassment, as sources warn that the pre-existing contracts did not matter to Gazprom and Putin, suggesting that more shock demands may be yet to come.
Speaking anonymously, a former head of a trading desk at Gazprom Marketing and Trading warned that Gazprom no longer cared about its image as a reliable and long term provider of gas around the world, Montel News reports.
They quote him saying: “In terms of how Gazprom sees itself, it’s a tool of the Russian government, there to help the economy.
“Gazprom likes to talk about reliability, but reliability only counts if you see a continuing relationship with your counterparty.
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An energy analyst also agreed with this source, adding that with the EU’s push to free itself from Russian energy dependency, Gazprom no longer cares about its reputation in Europe.
This comes as Germany declared a red alert warning as the “early warning stage” of a gas emergency following Russia’s squeezing of energy supplies.
Minister of Economics Robert Habeck has declared the “early warning stage” of the gas emergency plan.
He said in Berlin: “There are currently no supply bottlenecks.
“Nevertheless, we must increase precautionary measures in order to be prepared in the event of an escalation on the part of Russia.”