EU’s President Warns Companies Not to Comply with Russian Payment Terms

European Commission President Ursula von der Leyen has warned companies not to bend to Russia terms of payment by paying gas supply payments in rubles.

In a dramatic turn of events, Gazprom PJSC cut off supply of gas to Poland and Bulgaria after they declined to pay for supply in rubles.

According to Bloomberg citing a person close to Gazprom, some European companies have now met Vladimir Putin’s demands. Italian energy giant Eni SpA is preparing steps that would potentially allow it to comply, while Germany’s Uniper SE believes it can keep buying gas without breaching sanctions.

Four European gas buyers have made payment for gas supplies in rubles according to Bloomberg citing a person close to Russian gas giant Gazprom PJSC.

Meanwhile, ten European companies have already opened account at Gazprombank which is needed to make Russian payment demands.

“Companies with such contracts should not accede to the Russian demands,” von der Leyen said. “This would be a breach of the sanctions so a high risk for the companies.”

As payment deadlines start falling due over the next month, governments and companies across Europe have to decide whether to meet the new rules or face the prospect of gas rationing.

Benchmark prices surged on Wednesday more than 20% but then eased as traders reassessed the chances of a wider cutoff.

Germany also reiterated that companies should keep paying in euros, following EU guidelines, and Habeck said the continent had to be ready for a wider cutoff.

“Russia is showing that it’s ready to get serious, that if one doesn’t comply with supply contracts or payments, they’re ready to put a stop to gas deliveries,” he said. “We have to take that seriously, and that also goes for other European countries. I take that seriously.”