Austria to pay for Russian gas in roubles
Austria has ceded to Russian demands to pay for its gas supplies in roubles, amid escalating tensions between the West and the Kremlin.
Chancellor Karl Nehammer appeared to confirm the decision today, made in agreement with Austrian company OMW – which was involved in the project to build the now suspended Nord Stream 2 pipeline.
This follows state-backed energy giant Gazprom cutting off gas supplies to Poland and Bulgaria earlier today, after both countries refused to pay for Russian gas in roubles.
Last month, Russian President Vladimir Putin signed into law requirements for “unfriendly nations” to buy Russian gas in roubles.
Overseas buyers now have to open Gazprombank accounts and transfer euros and dollars, which will then covert the currencies into roubles prior to transactions.
Austria’s stance has been more circumspect – opposing plans to ramp up European Union (EU) sanctions on Russian energy supplies – with the trading bloc currently weighing up plans to phase down oil imports in line with established plans to cut down coal supplies.
The UK, Germany and Netherlands have all announced plans to cut off Russian oil imports this year.
EU remains dependent on Kremlin-backed fossil fuels
While the trading bloc averages a 40 per cent dependence on Russia for natural gas, Austria relies on Russia for around 80 per cent of its natural gas supplies and opted to trigger the early phase of its emergency gas plan last month, amid supply shortage fears.
The stance of EU leaders is more bullish and European Commission President Ursula von der Leyen has accused Russia of blackmail by suspending supplies.
“Gazprom’s announcement is another attempt by Russia to blackmail us with gas. We are prepared for this scenario. We are mapping out our coordinated EU response,” said von der Leyen on Twitter.
The EU has spent €43bn on Kremlin-backed fossil fuels in the past two months following Russia’s invasion of Ukraine.
It has agreed to reduce its dependence on Russian oil and gas by two-thirds by the end of the year and to zero by the end of 2027, and is targeting 80 per cent storage ahead of this winter.
Last winter, amid the escalating energy crisis the continent relied heavily on US liquefied natural gas (LNG) imports to head off supply shortages.