Russia Will Cut off Oil Exports Unless ‘Unfriendly’ Buyers Pay in Rubles

Russian oil buyers must pay in rubles or face being cut off from supplies, Russian President Vladimir Putin said Thursday. The Russian leader set a deadline of April 1, though “unfriendly countries” were left with some wiggle room. European leaders were reportedly caught off guard by the move, including Italian Prime Minister Mario Draghi.

“If unfriendly countries do not pay in rubles from April 1, we will consider this a default on gas contracts, in which case existing contracts will be stopped,” Putin said in a televised statement Thursday. By “unfriendly countries”, he meant primarily western nations, including the U.S., who have enacted crippling sanctions on Russia’s economy. Putin made the remarks after signing a decree that said contracts will be halted if buyers don’t open ruble accounts in Russian banks, along with meeting other conditions, according to the Associated Press.

The decree said that a designated bank will open two accounts for each buyer, one in foreign currency and one in rubles. Buyers would pay in foreign currency and authorize the bank to sell that currency for rubles. The rubles would be placed in the second account, where the gas would be purchased.

Prior to the decree, multiple European leaders claimed that Putin said they would be allowed to buy gas using euros. Italian Prime Minister Mario Draghi told Reuters that he was surprised by the move in a statement of his own. Putin announced that Russian oil buyers would be required to pay in rubles in a statement last week, though he may have indicated otherwise through private channels.

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Cullen McCue