EU Allows Gazprom Account Opening in Russia... European Gas Prices Fall (Summary)

Controversy Over New Guidelines for Russian Gas Purchase Transactions
European Natural Gas Down 4.5% Compared to Previous Session
Poland: "We Will Not Succumb to Putin's Threats"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The European Union (EU) has sparked controversy by announcing that it will allow member countries' gas companies to open accounts at Gazprombank for purchasing Russian natural gas. Critics argue that this move weakens the EU's sanctions by yielding to Russia's threat to cut gas supplies, raising concerns about the cohesion of the EU's sanctions.

According to Bloomberg on the 16th (local time), the European Commission stated in a press release, "On the 13th, new guidelines regarding gas purchase transactions with Russia were sent to each member state," adding, "Gas companies are not prohibited from opening accounts at banks designated by Russia under the EU's sanctions against Russia. Furthermore, companies that pay for Russian gas in the currency agreed upon in existing contracts and report that the transaction was completed in that currency are considered to be in compliance with the sanctions."

[Image source=EPA Yonhap News]

Bloomberg reported that this means the EU has directly allowed the opening of special accounts at Gazprombank, as previously demanded by Russia. Since the 1st of last month, the Russian government unilaterally declared that buyers from the EU member states and other Western unfriendly countries must pay for Russian gas in Russian currency, the ruble. However, it also announced a circumvention measure allowing payments in euros or dollars if a special foreign currency account is opened at Gazprombank, a subsidiary of the Russian state-owned gas exporter Gazprom.

Initially, the EU was opposed to accepting Russia's demands, but due to strong opposition from member states highly dependent on Russian gas, such as Germany and Italy, and the sharp rise in gas prices, it is reported that the EU allowed the account openings. Following the news of the EU permitting account openings, the Dutch TTF exchange, a major European natural gas benchmark, saw natural gas futures prices fall 4.5% from the previous session to 92.4 euros per megawatt-hour (MWh).

Among some EU member states, criticism has arisen that this measure represents a relaxation of sanctions in response to Russia's threat to cut gas supplies. Mateusz Morawiecki, Prime Minister of Poland, which advocates for ultra-tough measures such as a gas embargo, said at a press conference on the day, "I am very disappointed with the EU's decision," emphasizing, "Poland will stick to the rules and will not succumb to Putin's threats."

This content was produced with the assistance of AI translation services.