“Gazprom would need to ask buyers to agree to change the payment terms in contracts,” said Trevor Sikorski, head of natural gas, coal and carbon at Energy Aspects Ltd. “It reopens the contracts, and buyers could ask for shorter-terms for instance.”

Some 58% of Gazprom’s gross gas sales abroad were in euros as of the third quarter of last year, according to the producer’s most recent bond prospectus. Another 39% were in U.S. dollars. The press office of gas giant Gazprom PJSC declined to comment on whether its long-term supply agreements allow a switch to ruble payments.

Russia announced earlier this month a list of 48 states deemed hostile. They included the U.S., Japan, all European Union members, Switzerland and Norway. As a result, the bulk of Russian gas exports now go to “unfriendly” nations.

“At the same time, I want to emphasize that Russia will definitely continue to supply natural gas in line with the volumes and prices and pricing mechanisms set forth in the existing contracts,” Putin said.

In the first 15 days of March, Gazprom exported an average of 500 million cubic meters per day to countries outside the former Soviet Union, including those in the EU, China and Turkey. Of the total, flows toward Europe averaged 384 million cubic meters per day, the producer’s data showed.

Eoin Treacy's view

This change of policy serves the short-term requirement of creating demand for the Ruble which will make enforcing sanctions even more difficult. That suggests the recent low of the Ruble near RUB120 is likely to be a medium-term nadir.

Perhaps more importantly it represents an effort by Russia to open up long-term contracts, and to potentially secure higher prices more in tune with the prevailing macro environment.

UK natural gas prices completed the long-term base formation in July and might never trade back below £100.

The challenge for gas consumers is the volatility of the ruble. It represents significant foreign exchange exposure and particularly if the ruble rebounds from the recent lows.

Some of the only Russian shares still trading at gold miners. UK listed Petropavlovsk collapsed at the beginning of the month but hasn’t moves much since. That suggests investors are unwilling to continue to sell when valuations are so low, and the potential for a rebound on a benign war outcome is still possible.