(Reuters) -President Vladimir Putin said on Thursday that Moscow will work to re-direct its energy eastward as European countries try to reduce reliance on Russian exports, adding that Europe will not be able to completely shun Russian gas immediately.
Russia, which accounts for around 10% of global oil production, has been forging closer ties with Asia and China, the world’s top energy consumer, trying to diversify away deliveries from its traditional supply markets in Europe.
Western sanctions over Moscow’s military operation in Ukraine have hit Russian energy exports by complicating financing of the deals and logistics.
“What’s astonishing is that the so-called partners from unfriendly countries concede themselves that they won’t be able to make do without Russian energy resources, including without natural gas, for example,” Putin told a televised government meeting.
“There is no rational replacement (for gas) in Europe now.”
He also said that Europe, by talking about cutting off energy supplies from Russia, was driving up prices and destabilising the market.
“Unfriendly countries admit that they cannot do without Russian energy resources”, Putin said.
Russia’s “special military operation” in Ukraine has triggered an overhaul of the 27-country EU’s energy priorities as Brussels seeks to wrest countries free from depending on Russia, which supplies around 40% of the bloc’s natural gas.
Putin said that Russia will need to build infrastructure to boost its energy supplies to Asia.
Russia started pipeline gas supplies to China in the end of 2019 after years of painstaking talks and agreeing to cutting prices for the fuel.
Putin also said that the role of national currencies in exporting deals should rise, amid Russia’s plans to switch to roubles in payments for its gas supplies, mainly to Europe.
Russia has seen a steep decline in production of oil, its key source of revenues, amid difficulties with payments for trading and vessels.
Major global trading houses are planning to reduce crude and fuel purchases from Russia’s state-controlled oil companies as early as May 15, sources said, to avoid falling foul of European Union sanctions on Russia.
Putin said the most “acute” problems of the Russian energy sector were related to disruption of energy supply logistics.
(Reporting by Reuters; editing by Guy Faulconbridge)
