By Elena Fabrichnaya, Alexander Marrow and Vladimir Soldatkin
MOSCOW (Reuters) – New U.S. sanctions on Moscow may shut down the only way European customers can pay for Russian gas, increase volatility on Russia's FX market and push Moscow closer to Beijing's orbit, Russian economists said on Friday.
Washington imposed new sanctions on Russia's Gazprombank on Thursday that prevent the state-controlled lender from handling any new energy-related transactions that touch the U.S. financial system. The U.S. also targeted around 50 other Russian banks and the Bank of Russia's System for Transfer of Financial Messages (SPFS).
Hungary and Slovakia, both of which have long-term contracts with Russian energy giant Gazprom (MCX:GAZP), are studying the changes. Russian Deputy Energy Minister Pavel Sorokin declined to comment when asked if Gazprombank would continue receiving payments from European clients.
"EU payments for energy resources through Gazprombank will likely become impossible at the end of 2024," Sinara Investment Bank analysts said.
The sanctions included a wind-down period for transactions involving Gazprombank until Dec. 20 and for those related to the Sakhalin-2 oil and gas project in Russia's Far East until June 28, 2025.
The Kremlin said on Friday the sanctions were an attempt by Washington to hinder Russian gas exports, but a solution would be found. Gazprombank said the sanctions would not impact its banking operations, but did not respond to questions on gas payment solutions.
In March 2022, Moscow demanded that countries hostile to Russia pay for gas supplies under a scheme that involves the conversion of hard currency into roubles. Buyers could open two accounts at Gazprombank, one in roubles and one in foreign currency.
Now, they will need to find another intermediary.
The U.S. has authorised transactions related to energy with certain exceptions for a dozen Russian financial institutions until April 30, 2025. Some analysts say Gazprombank could be added to that list.
GEOPOLITICAL TENSIONS
"The tightening of sanctions fits into the latest round of escalating geopolitical tensions and, of course, looks like an attempt by the outgoing administration to use its available tools in the remaining time," Renaissance Capital economists Oleg Kuzmin and Andrei Melashchenko said.
U.S. President-elect Donald Trump, who is deeply sceptical of U.S. support for Ukraine, could remove the sanctions when he takes office.
The EU will have to contend with gas supply disruptions, said Yevgeny Kogan, professor at Moscow's Higher School of Economics, while Russia faces extra settlement and payment problems.
"This may significantly hit (and is already hitting) both the rouble and flows of foreign currency into the country," Kogan said.
The sanctions on Gazprombank and Russia's financial messaging system complicate financial interactions with Russian counterparties, likely raising the share of Chinese companies in Russia's foreign trade, Alfa Bank analysts said.
Russia is already grappling with payment issues due to Western restrictions blocking its banks from dollar markets and the SWIFT global payments system, as well as counterparties' risk of secondary sanctions, particularly as Russia expands trade with China.
"In the long run, (new sanctions) could mean that Chinese companies start considering options of direct investment in the Russian economy and that Russia's economic interaction with China will become closer," Alfa Bank analysts said.
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