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OPEC+ Cuts Fail To Boost Middle East Oil Prices

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The Baltic States Stop Importing Russian Gas

The three Baltic states—Lithuania, Latvia, and Estonia—have suspended all purchases of Russian gas, government officials said. For now, the needs of the three tiny nations will be satisfied from storage in Latvia, UAWire reported this weekend.

"If there were still any doubts about whether there may be any trust in deliveries from Russia, current events clearly show us that there is no more trust," said the head of Latvia's gas storage operator, Uldis Bariss, as quoted by local media.

On Sunday, Latvia's gas company, Latvijas G?ze, said that it had closed an eight-year supply contract with Gazprom, "which provides for settlements for natural gas in euros."

Lithuania's President, Gitanas Nauseda, called on the rest of the European Union to follow the Baltics' example, saying, "A year ago, my country made decisions that today allow us to break energy ties with the aggressor without pain. If we can do it, the rest of Europe can do it too!"

Lithuania imports all the gas it needs via the liquefied natural gas in Klaipeda. It can also import pipeline gas from Latvia and Poland through an interconnector, UAWire reported.

Last week, Russia's president announced that it will no longer accept payment for its natural gas in dollars or euros but will only accept rubles. This sparked panic across Europe, with governments preparing for shortages as they refused to pay for Russian gas in rubles.

The move concerns "unfriendly" states participating in anti-Russian sanctions, including the whole of the European Union, the United States, Switzerland, Canada, Norway, South Korea, and Japan, among others.

Immediately after the Russian announcement, European economies began to prepare for a potential shortage, although Russian gas is still flowing at normal rates. Disruptions, if any, could begin later this month when the first payments for gas fall due.

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Russia's ruble mechanism involves the buyer of gas opening two accounts with Gazprombank, one in foreign currency and one in rubles. It pays for gas deliveries in foreign currency, which the bank then converts into rubles before transferring them to the second account, from where the actual payment for the gas received is made.

By Irina Slav for Oilprice.com

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  • DoRight Deikins on April 04 2022 said:
    May have stopped importing gas from Russia, but as of 2022/4/4 2200 UTC, Lithuania is still importing 6% of its electrical power from Kalingrad (Russia).

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