New US sanctions mark end of EU energy payments via Russia's Gazprombank

New US sanctions against Moscow could shut down the only channel for European clients to pay for Russian gas, increase volatility in Russia's currency market, and push Moscow closer to Beijing's orbit.

Source: Reuters

Details: Washington imposed new sanctions on Russia's Gazprombank on 21 November, banning the state-controlled bank from conducting any new energy-related transactions involving the US financial system.

Hungary and Slovakia, which have long-term contracts with Russian energy giant Gazprom, are currently assessing these changes. Russian Deputy Energy Minister Pavel Sorokin declined to comment when asked whether Gazprombank would continue accepting payments from European clients.

"EU payments for energy resources through Gazprombank will likely become impossible at the end of 2024," analysts from Sinara Investment Bank stated.

The sanctions include a wind-down period for transactions involving Gazprombank until 20 December and for those related to the Sakhalin-2 oil and gas project in Russia’s Far East until 28 June 2025.

Background: Gazprombank has warned clients that, due to US sanctions imposed on the company, there may be disruptions in the use of UnionPay payment system cards abroad.

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