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New rules of NG market in Europe

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A few words on the gas situation in Europe.

The state of affairs today is as follows. Bloomberg reports that 10 European gas suppliers from 4 countries have agreed to switch to the payment settlement system of Gazprombank (colloquially "pay in rubles"). We know that one of these providers is the German Uniper. We know that Austria and Hungary also agree to the new system. Slovakia had previously indicated that in its economic situation it had to agree to the terms of the Kremlin.

Poland, Bulgaria and Lithuania rejected these conditions and Gazprom stopped sending gas to these countries.

It is widely believed that the new billing system does not change much. Because now Gazprombank will convert 100% of the euro received into rubles, and before that it had to convert 80%. In this tone he spoke, among others. Italy's energy minister.

Meanwhile, it is quite different. I am enclosing an excellent article describing the changes taking place in the payment mechanism. In short: Russia is getting rid of the need to have EUR accounts in the Western banking system. Moreover, Russia requires the recipient countries to join the Russian financial system. As a result, Russia reduces the risk of seizing Gazprombank's EUR accounts with Western banks and gives itself the opportunity to seize EUR gas customers' accounts in Gazprombank. In other words, the entire gas payment flow comes under Russia's control.

I can add two things. What Russia feared was being forced into a system analogous to the "Oil for Food" deal which Iraq was forced into. At that time, payments for Iraqi oil remained on blocked accounts in Western banks. And Iraq could use this money to a limited extent (buy, among others, food, hence the name of the program).

The second conclusion is an analogy to how the Internet was created in ancient times as ARPANET. One of the goals of its creation was decentralization so that connectivity was maintained even in the event of war and attacks on infrastructure (including nuclear attacks). As history has shown (and the war in Iraq), the goal was successful. What Russia started selling gas through Gazprombank is the transformation of the centralized system of global payments (based on SWIFT messages and dollar / euro accounts) into the financial ARPANET.

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