Russia Says Half of Foreign Gazprom Clients Opened Ruble Accounts
Around half of Gazprom PJSC’s foreign clients have complied with a request from Russia’s president to open accounts with Gazprombank JSC, according to Deputy Prime Minister Alexander Novak.
The shift in procedure follows a demand by Vladimir Putin in March that foreign buyers open ruble and foreign-currency accounts at the bank to handle payments for natural gas. But European companies have feared that doing so might violate sanctions imposed on Russia following its invasion of Ukraine.
“I think we have about 54 companies that have contracts with Gazprom Export,” Novak said Thursday at an event in Moscow. “According to the data I have, about half of them have already opened special accounts in our authorized bank -- foreign currency and ruble accounts.”
Novak, who is also Russia’s top energy official, did not name the companies or countries complying with the new payment mechanism, saying only that some of Gazprom’s major clients have either paid for deliveries or are ready to pay on time, avoiding a supply cutoff.
The market remains wary as payment deadlines fast approach. Moscow has already halted supplies to Poland and Bulgaria for non-compliance, and Finland has said there’s a “real risk” that flows will end this week as it’s refusing to pay in rubles.
The European Union, which last year imported about 40% of its gas from Russia, has found itself divided over Putin’s order. The bloc has told member states that the proposed payment mechanism violates sanctions, yet there’s been nothing in writing from the European Commission that explicitly stops companies from paying Gazprom under the new rules.
The global energy market has been roiled by the war in Ukraine, with concerns surrounding not only gas but oil supplies too. Russia’s oil production, which declined in March and April, is now recovering and will continue to grow in June, Novak said at the forum.
“In April, we cut production by some 1 million barrels a day, and in May we have increased it by 200,000 to 300,000 barrels,” he said. “We expect a further recovery in June.”
Many crude buyers have shunned Russian barrels following the invasion, though some Asian importers have stepped in to take shipments at discounted rates. Russian producers have been able to redirect some of their deliveries from regions such as the EU to other markets, from where flows may be shipped back to Europe, Novak said.
Russia’s Economy Ministry expects the nation’s oil output to drop to 475.3 million tons this year, down 9.3% from 2021, according to a base-case scenario published this week. Almost half of that production -- 228.3 million tons -- will be sent abroad, a decline of only 1.2% on an annual basis, while the slump in oil-product exports will reach 20%, the outlook showed.
The ministry expects gas production to fall 5.6% to 720.9 billion cubic meters this year. Pipeline gas exports are seen declining 10% to 185 billion cubic meters, though shipments of liquefied natural gas are forecast to grow 5.5% to 30.7 million tons.
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