Russia Changes Ruble Rules to Circumvent New Sanctions

The sudden sanctions imposed by the US on Gazprombank jeopardize Moscow’s contracts with Hungary and Slovakia, reported by Politico.

Russia will ease limitations on how foreign countries must pay for its fossil fuels in order to avoid additional penalties imposed by Washington on a major bank.

On Thursday, President Vladimir Putin issued an order lifting the requirement that payments go through Gazprombank, which is the subject of new US Treasury Department sanctions.

Since 2022, Russia has required European buyers to pay their accounts in rubles through the bank in order to avoid restrictions on dollar and euro transactions. Gazprombank was the main financial route for oil and gas payments to Europe.

The new rule modification will allow importers to utilize alternative banks or pay “in another way agreed upon by the Russian supplier with the foreign buyer.”

Budapest, which still relies on Russia for roughly two-thirds of its natural gas supplies, revealed on Wednesday that it had petitioned the US for an exception from the sanctions to allow it to continue doing business with Gazprombank.

As we reported earlier, the sanctions have already caused the Russian currency to fall, affecting gas payments to Hungary and Slovakia. Moscow’s central bank froze currency trade last week after the ruble’s value plummeted following the introduction of the latest restrictions.