European energy prices soar as Russia seeks rubles for its gas

European energy prices soar as Russia seeks rubles for its gas

European energy prices surged after President Vladimir Putin said Russia will demand payments in rubles from natural gas buyers it deems “unfriendly.”

Benchmark gas futures jumped more than 30%, followed by power and coal prices. Putin ordered the central bank to develop a mechanism to make ruble payments for gas within a week at a meeting with his government. While Russia named the US, the UK and members of the European Union as unfriendly nations, it said it will continue to supply gas in line with requests.

The announcement brought back fears about the stability of Russia’s supplies after a few days of relatively calm trade. Putin’s plan may mean an upheaval for long-term gas contracts in Europe, which are priced mostly in euros. Any supply disruptions as a result of changing rules would worsen Europe’s energy crisis. The region depends on Russia for about 40% of its gas.