Russia denies Germany ruble payment for gas after cutting off supplies to Poland and Bulgaria, report says

Russian bank Gazprombank refused payment in rubles from a trading company that Germany had seized in Moscow, sources told Bloomberg.

Payment for some April and May gas deliveries to Germany and Austria was rejected even though trading company Gazprom Marketing & Trading (GM&T) offered to pay in rubles, as demanded by the president Russian Vladimir Putin.

GM&T was previously controlled by the German subsidiary of Russian state-owned Gazprom, but Germany took over the unit in April. Now, the rejected ruble payment suggests that Moscow is seeking to exclude a German-controlled GM&T.

The trading company, which is among many companies importing gas into Germany, is still in talks with Gazprombank to complete the deal, sources told Bloomberg.

The standoff comes as the Kremlin uses its energy exports to retaliate against Western countries that imposed sanctions on Russia for its war on Ukraine.

Moscow cut off natural gas supplies to Poland and Bulgaria on Wednesday, pushing European gas prices up 28% and adding to fears that Putin could target other countries on the continent. Gazprom said the reason for the gas stoppage is that the two countries did not pay in rubles.

Meanwhile, four European gas buyers have paid Russia in rubles for the supplies, in line with Moscow’s demands, according to Bloomberg, which also said 10 European countries have opened accounts at Gazprombank to make payments in rubles.

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Elaine R. Knight