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FSUOGM POLICY FSUOGM

Energy sanctions against Russia are

like a "boomerang": Novak

RUSSIA RUSSIAN Deputy Prime Minister and former Russia is also looking to make more Euro-
energy minister Alexander Novak has warned pean buyers pay for Russian gas in rubles, and
Europe will suffer most that sanctions against Russia’s energy sector act as a preliminary step, the Kremlin published a
from the sanctions like a “boomerang,” hurting the countries that decree earlier this month that requires them to
that it has imposed, introduced them more. make payments to accounts at Gazprombank,
according to the The EU declared earlier this month that it where the money will be converted in rubles
former Russian energy would ban Russian coal imports, and the Euro- and transferred to Gazprom. Novak said that
minister. pean Commission has signalled it will impose several buyers had already agreed to transfer
restrictions on oil supplies as well in its upcom- gas payments into rubles, including Hungary,
ing sanctions package. While the bloc would and said Russia was waiting on decisions from
struggle greatly to wean itself off Russian gas in other importers.
the near term, it has the ambition of reducing The move to convert funds into rubles is logi-
supplies by as much as two thirds by the end of cal, Novak said, as it prevents the risk that foreign
the year and phase them out entirely by the end countries freeze funds that remain in euros and
of the decade. other foreign currencies. Under the current sys-
Meanwhile, numerous buyers have on their tem, Gazprom receives payments for its gas in
own initiative ended energy purchases from foreign bank accounts.
Russia. Novak also criticised European Commission
“Economic sanctions against Russia, which President Ursula von der Leyen’s recent claim
were announced by a number of unfriendly that the change in payment terms for Russian
states, have had an unprecedented impact on the gas was a violation of sanctions.
global economy and its key industries, including “The European Commission did not specify
energy,” Novak said in a commentary published exactly which provisions in the five packages
by Russia’s Energeticheskaya Politika journal on of anti-Russian sanctions already adopted by it
April 15. “The situation is developing accord- could be violated by transferring payments into
ing to the boomerang principle – the negative rubles,” he said.
consequences have largely affected precisely Lastly, Novak described decisions by foreign
those countries that initiated the sanctions energy companies such as BP, ExxonMobil and
restrictions.” Shell as “not voluntary”, implying that govern-
Novak pointed to the spike in gas prices ear- ments or perhaps public pressure had played a
lier this year to almost $4,000 per 1,000 cubic role in these decisions. These companies declared
metres, the climb in oil prices to $140 per bar- their desire to leave Russia after Moscow began
rel and coal to $460 per tonne. He warned that its invasion of Ukraine, but they are yet to find
energy prices could yet go higher, noting that buyers for their multi-billion dollar stakes in
there was still a lot of uncertainty in the global Russian oil and gas projects and companies.
market. While concerns about Russian sanctions “We are in constant contact with our foreign
have fuelled recent growth in prices, as the min- partners. We see that their desire to leave the
ister stated, recent price highs are also the cul- Russian market is not voluntary as a rule,” the
mination of a sharp rebound in energy demand minister said. “We hope that common sense and
over the past year and global supply constraints. economics will prevail.” ™

Week 16 21•April•2022 www. NEWSBASE .com P7