EU's reliance on Russian oil, gas makes it hard to cut trade ties

KYIV • Ukrainian President Volodymyr Zelensky yesterday called on European leaders to cease all trade with Russia in an effort to pressure Moscow to halt its nearly month-long military assault on his country.

"Please do not sponsor the weapons of war of this country, of Russia. No euros for the occupiers. Close all of your ports to them. Don't export them your goods. Deny energy resources. Push for Russia to leave Ukraine," Mr Zelensky said in a video address.

Addressing Germany directly, he said: "You have the strength. Europe has the strength."

Any steps targeting Russian oil would depend mostly on Germany, which has so far been the main source of resistance to expanding the scope of EU sanctions and other restrictive measures to the energy sector.

Chancellor Olaf Scholz's chief spokesman Steffen Hebestreit reiterated the government's position that, for the time being, Germany is reliant on oil imports from Russia and rejects an embargo.

Mr Zelensky's appeal comes as several European Union countries, including the Baltic states, have called for an embargo on Russian oil and gas imports.

"It's unavoidable we start talking about the energy sector, and we can definitely talk about oil because it is the biggest revenue to Russia's budget," said Lithuanian Foreign Minister Gabrielius Landsbergis.

EU foreign ministers were set to meet yesterday to discuss Ukraine and a possible tightening of sanctions on Moscow.

This comes ahead of Thursday's meeting of EU leaders in Brussels, where the idea of an oil embargo ls also likely to be discussed.

German Foreign Minister Annalena Baerbock said "the pictures that reach us from Ukraine are heartbreaking".

"This makes it even clearer that the EU, that the world that believes in a rules-based order, has to isolate this regime," she said as she arrived for the EU meeting.

She declined to answer a question on what could trigger sanctions on Russia's energy sector.

Meanwhile, Dutch Prime Minister Mark Rutte told a separate meeting that the EU was still dependent on Russian oil and gas and could not cut itself off by tomorrow, making clear that there were limits to what the bloc could do at this stage.

The Kremlin had earlier in the day cautioned against a European oil embargo, saying the move could "hit everyone".

"Such an embargo would have very serious consequences for the world energy market. It will have a very serious negative impact on Europe's energy balance," spokesman Dmitry Peskov told reporters.

Berlin is not alone in opposing moves to restrict Russian energy flows, with Hungary also among those against.

"Sanctioning energy is definitely a red line for us," Hungarian Foreign Minister Peter Szijjarto said in an online briefing. "We're not going to support sanctions that imperil Hungary's energy security."

Any decision would need to be taken unanimously by all 27 EU member states.

REUTERS, BLOOMBERG