Dumping the Dollar and Euro

Gazprom says gas supplies to China will be settled in rubles

Russia’s Gazprom announced on Tuesday that it had reached an agreement with China to start fulfilling its gas supply contracts with payments made in rubles or yuan instead of euros or dollars. The shift is part of a push by Russia to reduce its reliance on the US dollar, euro and other hard currencies in its banking system and for trade.

The announcement on Telegram comes just six months after a 30-year deal was signed between Gazprom and the China National Petroleum Corporation in early February, which said Russian gas supplies would be paid in euros as Russia looked to separate itself from the U.S. just weeks before the “special military operation” began in Ukraine.

Gazprom CEO Alexei Miller said the payment arrangement would prove “mutually beneficial” for both state owned energy agencies as Russia and China look to bolster their economies amid flagging relations with the West. 

“I believe that it will simplify the calculations, become an excellent example for other companies, and give an additional impetus to the development of our economies,” Miller said.

Russian President Vladimir Putin signed a decree in March that required all Gazprom sales to Europe be paid in rubles after the U.S. and NATO hit Moscow with steep international sanctions immediately following the invasion of Ukraine.

Moscow has since cut gas to several European nations including Germany, Denmark, Poland, Bulgaria, Finland and the Netherlands after they refused to abide by Russian presidential decree.

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