December 5, 2023

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Russia’s Oil: UK License Gazprom for Gas Payment


CEM REPORT | Russian Gazprom bank gets United Kingdom license to receive payment for gas going to European Union countries

Bloomberg reports that the Britain’s Treasury under the new licence published late on Thursday, said payments to Gazprombank for gas being made available in the EU under contracts entered into before April 21 could continue until May 31.

According to the document, the license allows transactions with Gazprombank and its subsidiaries “for the purpose of making gas available for use in the European Union,”


That includes the opening and closing of bank accounts until the license expires.

Russian gas accounts for about 40% of EU imports. Brussels has not formally discussed ending Russian gas imports as part of its measures against Moscow over the Ukraine conflict given the bloc’s reliance on them.

[READ ALSO] Russia Find Means to Survive Amidst Sanctions

Recall that, last month, the United Kingdom placed sanctions on Gazprombank, giving counterparties until April 23 to wind down their operations with the lender, which is one of the primary payment conduits for Russian oil and gas.

Putin threatened to halt gas supplies to buyers that don’t comply with last month’s decree stating European customers must open two accounts, one in a foreign currency and one in rubles.

A week after the sanctions were imposed by the United Kingdom, Russian President, Vladimir Putin issued an order mandating that beginning in April, all Russian gas deliveries be paid in roubles and deposited with Gazprombank, where payments in euros or dollars would be changed into roubles.

The EU has not sanctioned Gazprombank or Russian gas, and it has yet to decide whether the proposed rouble payment method would be in violation of its broader package of Russian sanctions over the Ukraine conflict.

According to Gazprom, the Russian energy giant continues to supply natural gas to Europe via Ukraine in response to requests from European consumers.

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