Europe may lose Russian gas if it does not pay in rubles, warns Moscow

Russia said it still expects the European countries who sanctioned it over the invasion of Ukraine to pay for gas exports in rubles instead of euros by the Mar. 31 deadline, despite objections from Western nations.

"No one will supply gas for free, it is simply impossible, and you can pay for it only in roubles," Kremlin spokesperson Dmitry Peskov told reporters on Tuesday, according to Reuters.

President Vladimir Putin announced last week that “unfriendly” countries would be required to pay for Russian natural gas in Russian currency, saying that “a number of Western countries made illegitimate decisions on the so-called freezing of the Russian assets, effectively drawing a line over reliability of their currencies, undermining the trust for those currencies.”

“It makes no sense whatsoever," Putin added, “to supply our goods to the European Union, the United States and receive payment in dollars, euros and a number of other currencies.”

European countries have objected, saying that Russia is not entitled to redraw contracts.

But announcement drove European gas prices up 30% due to uncertainty and exchange rates, deepening the worst energy crisis Europe has faced since the 1970s.

The European Union has been reluctant to ban Russian energy imports as the U.S. has because they account for 40% of Europe’s total gas consumption. Some countries are even more reliant, such as Germany.

Governments have begun planning for the worst case scenario where Russia cuts it off from gas. Germany says that prioritize heating homes over industrial use, meaning energy-hungry manufacturers like steelmakers would be the first to experience any supply cuts, according to Reuters.

Russia has been accused of leveraging its energy exports for political gain before, such as when it reversed flow on a key gas pipeline last December.

The change has also boosted the Russian ruble, which tumbled to record lows after Western countries imposed sweeping sanctions against Russia over its invasion of Ukraine.