The Kremlin says Russia should work on ruble payments for oil, grain and minerals

LONDON (Reuters) – The Kremlin said on Wednesday it was a good idea to demand that the ruble be paid for exports of oil, grain, fertilizer, coal, minerals and other commodities as well as natural gas, as well as natural gas.

In response to tough Western sanctions on Russia over the invasion of Ukraine, Russian President Vladimir Putin has insisted that natural gas exported to Europe or the United States must be paid for in his country’s currency, a measure his government said could be in place this week. .

Russia’s top legislator Vyacheslav Volodin said on Wednesday that the ruble payment could be extended to include exports of oil, grain, minerals, fertilizers, coal and timber to the European Union.

Asked about Volodin’s comments, Kremlin spokesman Dmitry Peskov said: “This is an idea that definitely should be worked on.”

Europe has so far refused to pay for gas in rubles, paving the way for a standoff that led Germany to announce on Wednesday an “early warning” that it could be heading for a supply emergency.

Russia says it will make practical arrangements by Thursday for foreign companies to pay for gas in their own currency. Read more

“If you want gas, look for the ruble,” Volodin, the speaker of the Chamber of Deputies, said in a post on Telegram.

Peskov said the dollar’s role as a global reserve currency had already been damaged in recent years, and that a move to price Russia’s largest export in rubles would be “in our interest and those of our partners.”

Germany said its early warning measures were aimed at preparing for a possible disruption or interruption of natural gas flows from Russia. Read more

Europe, which imports about 40 percent of its gas from Russia and pays mostly in euros, says Russian gas giant Gazprom has no right to re-withdraw contracts. The Group of Seven rejected Moscow’s demands this week.

Boomerang

Russian officials have repeatedly said that the West’s attempt to isolate one of the world’s largest producers of natural resources is an irrational act of self-harm that will drive up prices for consumers and push the economies of Europe and the United States into recession.

Russia says the West’s sanctions – in particular the freezing of the Russian Central Bank’s roughly $300 billion of reserves – amount to declaring economic war.

Putin says the freezing of central bank reserves was a default in the West’s obligations to Russia, which would undermine confidence in the US dollar and the euro.

Former President Dmitry Medvedev said Western sanctions have “bounced back” once again to undermine the economies of Europe and North America, driving up fuel and heating prices and undermining confidence in the dollar and the euro.

“The world is waking up: confidence in reserve currencies is melting like morning fog,” Medvedev said. “Abandoning the dollar and the euro as the world’s major reserves no longer seems like a fantasy.”

Medvedev said that “crazy politicians” in the West sacrificed taxpayer money on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”

Russia has long sought to reduce dependence on the US dollar, although its main exports – oil, gas and minerals – are priced in dollars on world markets.

Globally, the dollar is by far the most traded currency, followed by the euro, the yen, and the British pound.

(Reporting by Guy Faulconbridge). Editing by Conor Humphries and Frank Jack Daniel

Our criteria: Thomson Reuters Trust Principles.