His decision Vladimir Putin to prohibit on “enemy countries ” to pay the Russian gas in dollars and euros likely to help “de-dollarize” it energy marketbut its implementation remains very uncertain, he estimates energy expert Nicolas Mazzucchi, researcher at the Fondation pour la recherche stratégique (FRS) in France.
Except for the fact that the decision risks looking like breach of contractas many analysts and the German government have pointed out since yesterday, the difficulties concern him pricing and their selection intermediate banks.
Question: Did Vladimir Putin’s decision to ban Europeans from paying for hydrocarbons in dollars or euros surprise you?
Answer: “In a sense, these are the Russian countermeasures to the sanctions that we expected, since we must remember that when a package of sanctions was imposed on Russia in 2014, it imposed sanctions, mainly in the field of imports of processed European agricultural products, therefore, against someone “In this way, Russia implements countermeasures and strikes where it hurts.”
Question: What could be the consequences?
Answer: “If it works, there will be two consequences: an artificial rise in the ruble exchange rate, as there will be demand for the ruble, which was affected by Russia’s decision to start this war in Ukraine. Second interesting (for Russia) consequence, since there will be “de-dollarization” in one way or another, this allows to avoid all or part of the US sanctions that may be based on the use of the dollar, since much of the extraterritoriality in American law is based on the dollar. “Dollarization” is an attempt to remove American ability to exert pressure.
In relation to Iran in particular, all of the United States’ ability to block Iran’s trade was summed up in the ban on trading in dollars. “And as in the world of oil and gas today, everything is done in dollars, saying ‘no more dollars, no more euros’, potentially Moscow can hope to circumvent some sanctions.”
Question: Which companies are affected by this decision?
Answer: All those who will buy hydrocarbons directly from Russia. To date, we have had TotalEnergies. The group has finally announced for oil and petroleum products, but it remains natural gas … We have Engie, for natural gas, and everything related to Nord Stream (in which it has a 9% share).
To date, in a contract such as Nord Stream, the volume of gas has been valued in dollars. It’s X dollars per 1,000 cubic meters. Since Russia wants to implement a ruble-based system, the question is how do we convert this amount from dollars to rubles, which reference currency will we use.
(…) We will need to see how it will be implemented. What will be the reality of the application, if we have to go through specific banks. If so, if these are banks that do not have the capacity to operate on European soil, should we go through third countries? “This may be the case. Any factor, if it wants to continue trading hydrocarbons with Russia, if it has to implement its own strategy and its own network, there will not necessarily be a model.”
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