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Global Oil Production Dropped To A 7-Month Low In January

Global Oil Production Dropped To A 7-Month Low In January

Global oil production fell significantly…

No, The Vatican Is Not Paying For Russian Gas In Rubles

A tweet went viral on Wednesday, claiming that the Vatican has reportedly become the first customer in Europe to pay in rubles for Russian natural gas. The report turned out to be a joke, the author of the tweet later said, apologizing to their followers.  

Still, the report made it in some Russian and even Western media. The bank of the Vatican bought rubles of the equivalent of $11 million (10 million euro) from the Central Bank of Russia, according to sources some Russian media quoted.

Russian President Vladimir Putin has set a March 31 deadline for the government, Gazprom, and the central bank of Russia to make the arrangements for payments in rubles for Russian gas from the so-called “hostile” countries.

The Russian President—whose list of “hostile” states includes the United States, all EU member states, Switzerland, Canada, Norway, South Korea, Japan, and many others—ordered last week the central bank to develop a system for payments in rubles within a week.  

On Wednesday, the energy markets in Europe were bracing for a potential disruption to Russian natural gas supply ahead of the March 31 deadline for ruble payments for gas.

The EU, G-7, and leaders of the biggest economies in Europe have said over the past week that changing the currency of the payments would be a breach of contract and that Europe would not be blackmailed into buying gas with rubles.

As the deadline for the gas-for-rubles switch approaches, Germany and other European countries activated emergency plans in case supply from Russia is disrupted or halted after Thursday.

In addition, Moscow signaled on Wednesday that it could soon demand rubles for other exports, including those of oil, metals, and grains. 

Russia, for its part, says it demands only rubles for its gas and will not give its gas for free. Kremlin spokesperson Dmitry Peskov said on Tuesday, as carried by Reuters:

“No one will supply gas for free, it is simply impossible, and you can pay for it only in rubles.”     


By Julianne Geiger for Oilprice.com

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