BAKU, Azerbaijan, April 4. Asian oil and gas importers are not expected to make future payments for Russian supplies in roubles, although Russia following through with its promise to shut off oil and gas deliveries would drastically turn the tables on buyers, Trend reports with reference to Fitch Solutions.
The company says in its latest report that little concrete details are available so far apart from the fact that buyers would need to open special roubles accounts if Russian demands were to be met.
“However, given significant reservations being expressed among
buyers against the forced change to existing contract terms,
exacerbated by the
abrupt nature of it, the likelihood of buyers appeasing Russia’s
demands remains low. A considerable reduction in oil and gas
supplies from Russia, while not our core view, poses upside risk to
already elevated energy prices in Asia, where governments are
resorting to various measures including, in the short term, price
freezes, tax cuts and even strategic storage releases, and in the
long term, accelerating investments into renewables and further
building up strategic stocks, to protect consumers and businesses
from negative price effects,” Fitch Solutions noted.
The company notes that a prolonged period of elevated prices looks difficult to avoid as market concerns over security of supply are sure to mount, providing opportunities for spare capacity holders within the region, Middle East and the Americas to replace Russian volumes.
---
Follow the author on Twitter: @Lyaman_Zeyn