Longer term, forcing a switch in payments for its energy exports to its own currency might make the Russian economy and financial system less vulnerable to external pressures but would leave it more isolated from the global economy and financial system and with a much-reduced economy and poorer standards of living.

Putin did say that Russia would continue to supply gas in line with existing contracts and the volumes and pricing mechanisms within them but the implicit threat that underlies the demand for payments in roubles is that he will cut off supply.

While a refusal to supply would cause havoc in European energy markets, sending energy prices soaring and plunging Europe into recession, it would be even more damaging to Russia itself.

The critical question is whether he can actually enforce the conversion of payments under existing contracts from euros or dollars into roubles.

Germany, which gets about 55 per cent of its gas from Russia, has already said the announcement would be a breach of contract, as has Gazprom’s second-largest customer, Italy. They’ve signalled an intention to continue paying in euros and are threatening to take the matter to arbitration if Gazprom doesn’t deliver the contracted gas. They appear prepared to call Putin’s bluff, if that is what it is.

That threat is unlikely to concern Putin but if he were to fail to coerce foreign buyers into converting their payments into roubles – and the European Union contains the key customers – and halted supply, he would lose his largest source of income and foreign exchange. Energy sales contribute about 40 per cent of the Russian government’s revenues.

While a refusal to supply would cause havoc in European energy markets, sending energy prices (which are already at very high levels) soaring and plunging Europe into recession, it would be even more damaging to Russia itself. It would effectively be self-sanctioning and closing the biggest hole in the web of sanctions the West has imposed.

It would also accelerate existing European efforts to reduce their reliance on Russian energy, which (coincidentally) accounts for about 40 per cent of Europe’s energy supplies.

The EU is desperately trying to diversify its energy supplies, competing with Asian buyers for LNG and reopening coal mines and nuclear facilities. Its short-term goal is to get hold of enough gas and increase its stores of gas sufficiently to get through the next two northern winters.

Beyond that it wants to remove Russian energy as a geopolitical weapon or leverage that can be used against it.

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Joe Biden is in Europe at present seeking to agree a deal with the EU to supply US gas and hydrogen to Europe as part of that strategy, with the US signalling that there would be both immediate and long-term elements to any deal.

There has been pressure on the Biden administration, from Ukraine and the US Congress, to extend the existing sanctions to Russian energy exports but the EU, and Germany in particular, have resisted the calls for an embargo because of the dire impact it would have on their economies.

If Putin were to threaten to cut off the supply of gas to Europe, of course, resistance to tightening the sanctions would be pointless. The impact on Russia would extend beyond the loss of revenue from sales to Europe because of the effects of the broader financial sanctions on other customers.

Even if Biden can’t convince the Europeans to add energy to the sanctions list there are other measures the West can take to tighten the noose around Russia’s economy, most notably the explicit threat of secondary sanctions for any institution, or perhaps country, that facilitates Russian financial transactions or supplies anything other than humanitarian goods to Russia.

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