Russia will seek payment in rubles for natural gas sold to “unfriendly” countries, President Vladimir Putin said on Wednesday; and European gas prices soared on concerns the move would exacerbate the region’s energy crunch.
European nations and the United States have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on February 24. But Europe depends heavily on Russian gas for heating and power generation, and the European Union is split on whether to sanction Russia’s energy sector.
Putin’s message was clear: If you want our gas, buy our currency. It remained unclear whether Russia has the power to unilaterally change existing contracts agreed upon in euros to rubles.
The rubles briefly leapt after the shock announcement to a three-week high past 95 against the dollar. It pared gains but stayed well below 100, closing at 97.7 against the dollar, down more than 22% since February 24.
Some European wholesale gas prices were up to 30% higher on Wednesday. British and Dutch wholesale gas prices jumped.
Russian gas accounts for some 40% of Europe’s total consumption. EU gas imports from Russia this year have fluctuated between €200 million to €800 million ($880 million) a day.
The port of Berdyansk in southern Ukraine was rocked by a series of heavy explosions soon after dawn on Thursday. The port had recently been occupied by Russian forces and several Russian warships were docked there.
Social media videos showed fires raging at the dockside with a series of secondary explosions reverberating across the city.
The Armed Forces of Ukraine said they had “destroyed a large landing ship” which they named as the “Orsk.”
Several Russian ships had been unloading military equipment at Berdyansk in recent days, according to reports from the port by Russian media outlets.
The Ukrainian armed forces said that, besides destroying the Orsk, “two more ships were damaged. A 3,000-ton fuel tank was also destroyed. The fire spread to the enemy’s ammunition depot. Details of the damage inflicted on the occupier are being clarified.”
It’s not known what weapon was used to attack the port.
Analysis of viral videos uploaded on Thursday; also showed one Russian naval vessel leaving the port soon after the explosions.
The Russian Ministry of Defense had previously reported that “the large landing ship Orsk is the first warship of the Russian Federation to enter the port of Berdyansk. It delivered equipment — armored personnel carriers.”
“The ships of this project are very spacious and can take on board a large amount of equipment, up to 20 tanks or up to 40 armored personnel carriers,” the ministry added.