As energy exports fill the current account, the ruble reaches a four-year high.

On Monday, the Russian ruble rose to a fresh four-year high as the currency continued to be supported by foreign inflows produced by its oil exports.

The dollar has dropped 4.1 percent to 57.74 rubles at 11:06 a.m. ET (1506 GMT), its lowest level since April 2018. It had risen from 62.80 rubles at the start of the year to 121.20 rubles after the invasion of Ukraine. Monday's surge, on the other hand, solidifies the ruble's position as the best-performing major emerging market currency thus far in 2022.

The West's attempts to penalize Russia for its invasion of Ukraine have placed a large geopolitical risk premium on oil and gas, causing Russia's current account surplus to explode this year. As a result, the central bank has been able to reverse some of the emergency steps it took to stabilize the ruble during the invasion. It has now lowered its key rate from 20% to 14% and loosened some of the banking system's most draconian capital regulations.

The current rally in the ruble occurred following further indications that the European Union is failing to carry out its stated goal of reducing the Kremlin's export cash stream. Last week, Italian oil and gas major Eni (BIT:ENI), one of Gazprom's (MCX:GAZP) largest customers, announced it will comply with a Russian demand to create a bank account in rubles to execute its purchases. The European Commission has expressed its displeasure, claiming that Russia's activities amount to an unlawful one-sided redrawing of a legally binding supply contract.

Furthermore, newswires reported earlier Monday that the EU's attempts to get its 27 member states to sign on to a Russian oil embargo by the end of the year are still being stymied by Hungary, whose government has stated such a step would devastate its economy. Hungary, like Slovakia, Bulgaria, and other Central and Eastern European nations, is too reliant on oil and petroleum imports from a pipeline system created when they were Soviet satellite republics.

To take effect, EU sanctions must have unanimous approval. Temporary exclusions for countries like Hungary and Slovakia have so far failed to persuade the dissenters.