Thread by @_PierreNoel_

1/8 Russia is demanding that European buyers pay for their gas in roubles. The driver for that is the freezing of #Russian foreign reserves and the #sanctions on the central bank.
#SanctionsRussia #NaturalGas #EnergyCrisis

2/8 Nominally, buying Russian gas is not banned, but that supposes that Russia will accept currency instruments it can't sell to support the rouble.

3/8 Hence the strange-sounding alternative to straight rouble payments that Russia has proposed: Gazprom's clients would open rouble accounts with Russian banks, but still pay in EUR or USD.

4/8 Here is a quote from the @MoscowTimes yesterday: "Buyers will transfer payments into a Gazprombank account in foreign currency, which the bank will then convert into rubles and transfer into the buyer's ruble account."

5/8 What it means, effectively, is that Gazprom, after it is paid in USD or EUR, would effectively send them back to its clients, against roubles. European buyers would then... breach EU sanctions on the central bank.

6/8 This is why European ministers flatly rejected it. Why not accept to pay for gas in roubles? Because it can't be done without effectively dealing with the central bank, before or after. The choice is: breaching your own sanctions or making do without Russian gas.

7/8 A contract disagreement is not supposed to lead to supply interruption and in normal times would not. Gazprom has always been very reliable and predictable, including during the harsh renegotiations after 2010, a number of which went to arbitration.

8/8 But these are not normal times. My sense is that Russia has written off the gas relationship with Europe. The time to inflict pain is now. Gas supply interruption is very likely.
@ColumbiaUEnergy