Russia’s Gazprom says it has struck a deal with China for the payment of Russian gas in both their currencies (Yuan and Rubles) instead of the global standard currency, the US dollar.
The deal was signed to put off the dollar hegemony as the global monetary of the transaction, following the US sanction of Russia, and also to show the growing relationship between Moscow and Beijing.
Initially, President Putin had warned any country that wanted to continue trading for gas with Russia to open a roubles account, this serves as a blow to most of the European countries who have been trading euro/dollar for Russian gas, and the ban on euro for gas led to the decline of the currency for the first time in over 20 years.
A report from Gazprom CEO Alexei Miller who signed the deal with China oil group CNPC was quoted as saying “the new payment mechanism will bring about practicable benefit, reliable and practical solution, and will become an excellent example for other companies”.
The Gazprom CEO and their Chinese counterparts welcome the new development in their diplomatic relations, but further details on when the payments would switch into the new monetary system remain undisclosed.
With Russia keen on improving diplomatic ties with China and non-Western countries, after being isolated by the western countries, it became apparent that Moscow is ready to close the deal with non-compliant western countries soon.
The soaring global energy prices were a result of Russia’s action to stop the supply of energy to some European countries for their unwillingness to open a roubles account with Gazprom as ordered by President Putin.
Russia remains resolute on her stance of not supplying gas to any western countries until they revoke their sanctions on Moscow, and instead, it remains cool doing energy business with Beijing.