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G-7 Answers Putin’s Rubles-For-Gas Demand: No
Last week, Vladimir Putin had an idea.
Like most of his ideas lately, it wasn't a particularly good one.
With the ruble seemingly destined for obscurity and Russia constrained in its capacity to use any hard currency it receives from energy exports, he demanded all natural gas contracts be paid in rubles.
To be fair, Putin's decree was logical assuming you can get past the fact that it wouldn't have been necessary absent a wholly illogical decision he made three weeks previous.
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From my armchair, I think Putin should
Withdraw Russian troops to the separatist portion of eastern Ukraine, Crimea, and a land bridge between three two, establish defensive positions, and declare glorious victory.
Shut off gas to Europe completely, throwing Europe into chaos and a deep recession, and demand sanctions be lifted in return for re-opening the taps.
Build sufficient pipelines to send the majority of Russian gas and oil to friendlier customers in Asia (China, India).
#1 because he needs to end the war with a “victory“, and seizing more of Ukraine can be presented domestically as such, even if risible outside Russia. Ukraine’s army will have a hard time dislodging Russian forces from established defensive positions with a friendlier local populace and shorter supply lines.
#2 because if Europe plans to end purchases of Russian gas and oil, why give them the luxury of doing it at a pace tolerable to them? Inflict as much economic damage on Europe as he can, plunge them into deep recession, and motivate Germany, Poland, etc to call for a cessation of economic hostilities.
#3 because Russian’s only hope now is to pivot hard to the East and build that Russia-China bloc that he has so clumsily endangered. The technology he can no longer get from the West can, eventually, be gotten from China.
This may not be a great outcome, but he is in a salvage and survive situation now.