EXPLAINER: What would paying for natural gas in rubles mean?

BERLIN (AP) — Europe's already high gas prices have gyrated since Russian President Vladimir Putin announced plans to have importers pay for Russian natural gas in rubles instead of dollars and euros.

Here's a look at the implications of such a move, and why many are baffled by Putin's demand:

WHAT IS PUTIN PROPOSING?

Europe imports large amounts of Russian natural gas to heat homes, generate electricity and fuel industry, and those imports have continued despite the war in Ukraine.

Around 60% of imports are paid in euros, and the rest in dollars. Putin wants to change that by requiring foreign gas importers to purchase rubles and use them to pay state-owned supplier Gazprom.

Putin told the Russian central bank last Wednesday to come up with a workable system by Thursday.

WHAT EFFECTS COULD THAT PLAN HAVE?

Importers would have to find a bank that would exchange euros and dollars for rubles. That could be cumbersome because some Russian banks have been either blocked or cut off from the SWIFT messaging system that facilitates international payments.

Still, there are some banks that haven't been cut off, and for now, sanctions imposed by the U.S. Treasury barring bank transactions contain exceptions for energy payments. That's a concession to European allies that are much more reliant on Russian oil and gas and fear a total cutoff could throw their economy into recession.

Russia getting paid for gas in their currency would at best help marginally in getting around financial sanctions, propping up the ruble’s value or protecting the Russian economy, said Eswar Prasad, professor of trade policy at Cornell University and a former official at the International Monetary Fund.

“Either Putin is getting terrible economic advice or he is going further off the rails in his...