Russia: Fifth round of sanctions to come predicts expert
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While crippling economic sanctions have battered Russia amid its invasion of Ukraine, the EU has been slower than others to target Putin’s energy empire. But as leaders of the 27 nations meet in Brussels today to discuss options that could finally deal a blow to Russian energy, Putin may have made them think twice.
The Russian President said on Wednesday that a list of “unfriendly”
countries, including EU members and the US, would only be allowed to purchase gas using Russian rubles.
He said: “I made the decision to implement within the shortest possible time the package of measures to transfer payments — we will start with that — for our natural gas supplied to the so-called ‘unfriendly’ states to Russian rubles.”
Experts suspect this is Putin’s attempt to swerve fresh sanctions.
Timothy Ash, an emerging market sovereign strategist at BlueBay Asset Management, said: “It’s a game, it’s trying to bully the West to moderate sanctions.
“He wants to force the West — if they want to continue with energy imports from Russia — to transact with Russian entities.
“This is an attempt to break sanctions, to weaken the resolve of the West.”
Francesco Giavazzi, an economic advisor to Italian Prime Minister Mario Draghi, said at an event on Wednesday: “Paying in rubles would be a way to avoid sanctions, so I think we keep paying in euros.”
Two senior Western EU officials told Politico the EU would not be able to accept these demands and have to abandon Russian gas entirely.
This comes as the bloc currently lags behind its allies, with the US already having slapped an embargo on Russia’s oil and gas.
The UK has pledged to phase out Russian oil by the end of the year and is looking at options to cut Putin’s gas too, although it only accounts for four percent of Britain’s total supplies.
But the bloc, which gets 40 percent of its gas from Russia, has been drafting up measures to scupper energy ties with Russia over the past weeks.
Its energy strategy- REPowerEU- was published earlier this month.
It details a plan to slash oil and gas imports by two thirds by the end of the year, and completely scupper ties by 2030.
Part of the plan involves importing more liquified natural gas (LNG) from alternative suppliers, like the US for example.
This is so it can diversify its gas sources and slash dependence on Russia.
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Now, that plan could be coming to fruition.
Mr Biden’s national security adviser, Jake Sullivan, said that an agreement with the EU could be announced as soon as Friday.
Mr Sullivan told reporters: “A major priority for both the president and his European allies is to reduce the dependence of Europe on Russian gas, full stop, and the practical road map for how to do that – what steps have to be taken, what the United States can contribute, what Europe has to do itself.
“This has been the subject of intense back-and-forth over the course of the past few days and weeks…
“You can expect that the US will look for ways to increase LNG supplies, surge LNG supplies to Europe, not just over the course of years, but over the course of months as well.”
European Commission President Ursula von der Leyen wrote on Twitter: “Energy policy is also security policy.
“Tomorrow I will discuss with Joe Biden how to prioritise LNG deliveries from the US to in the coming months.
“We are aiming to have a commitment for additional supplies for the next two winters.”
Mr Biden will also be present at the meeting in Brussels, but it is still unclear how a new arrangement would work or if it would include an agreement on pricing.
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