Europe prepares fresh Russia sanctions as US warns Moscow plans to annex parts of east Ukraine

European Commission expected to propose sixth package of sanctions this week as hopes rise of more Mariupol evacuations

The European Union was preparing sanctions on Russian oil sales over its invasion of Ukraine after a major shift by Germany, Russia’s biggest energy customer, that could deprive Moscow of a large revenue stream within days.

Attempts to increase economic pressure on Russia come amid hopes of more evacuations from the besieged city of Mariupol, while the US warned that Moscow was preparing to formally annex the Donetsk and Luhansk regions in the country’s east.

“The reports state that Russia plans to engineer referenda upon joining sometime in mid-May,” said Michael Carpenter, the US ambassador to the Organisation for Security and Co-operation in Europe on Monday. He said that Russia was considering a similar plan in a third region, Kherson, where Moscow has recently solidified control and imposed use of its ruble currency.

The European Commission is expected to propose a sixth package of EU sanctions this week against Russia over its 24 February invasion of Ukraine, including a possible embargo on buying Russian oil.

Kyiv says Russia’s energy exports to Europe, so far largely exempt from international sanctions, are funding the Kremlin war effort with millions of euros every day.

“This package should include clear steps to block Russia’s revenues from energy resources,” Ukrainian president Volodymyr Zelenskiy said in his nightly video address on Monday.

Germany said on Monday it was prepared to back an immediate EU embargo on Russian oil. “We have managed to reach a situation where Germany is able to bear an oil embargo,” German economy minister Robert Habeck said.

Chancellor Olaf Scholz, who has been more cautious than other Western leaders in backing Ukraine, has been under growing pressure to take a firmer line.

Scholz vowed sanctions will not be lifted until Russian president Vladimir Putin signs a peace deal with Ukraine that Kyiv can support, he said in an interview with ZDF public television.

Weaning Europe off Russian oil is likely to be easier than reducing dependence on Russian natural gas. Moscow has demanded European customers pay for gas in roubles, which the EU rejects. Last week, Moscow cut off supplies to Poland and Bulgaria.

EU ministers meeting on Monday warned that complying in full with Moscow’s demand for gas payments in roubles would breach existing EU sanctions. Ambassadors from EU countries will discuss the proposed oil sanctions when they meet on Wednesday.

The moves came as Zelenskiy said the Mariupol evacuation effort was continuing and he expected more movement of people through humanitarian corridors on Tuesday from Berdyansk, Tokmak and Vasylivka. Mariupol’s city council said evacuations would restart at 7am local time (0400 GMT) on Tuesday.

Hundreds remain trapped in underground bunkers and tunnels beneath the sprawling Azovstal industrial site – the last stronghold of resistance to Russia’s siege of the devastated southern port city – which Moscow’s forces resumed shelling overnight.

“The situation has become a sign of a real humanitarian catastrophe,” Ukraine’s deputy prime minister Iryna Vereshchuk said, with supplies of water, food and medicine fast running out.

Some evacuees were initially taken to a village held by Moscow-backed separatists, but later allowed to continue to Ukrainian-held territory if they wanted.

However, while the head of the Donetsk military administration said more evacuations under a UN/Red Cross plan were set to begin on Monday morning, by late afternoon the buses had not reached the agreed pickup point.

Speaking earlier from the Russian-controlled town of Bezimenne, evacuee Natalia Usmanova, 37, said after leaving the steelworks that she became hysterical whenever the bunker started to shake. “I was so worried it would cave in – I had terrible fear,” she told Reuters, recalling widespread terror and a lack of oxygen underground.

Mariupol, which is almost entirely held by Russian forces, is a key target because its capture would deprive Ukraine of a vital port, open up a land corridor to Crimea, which Moscow seized from Ukraine in 2014, and free up troops for what has become the main focus of the invasion: achieving full control of the eastern Donbas region.

Ukraine said on Monday it had formally closed the Black and Azov seaports of Kherson, Mariupol, Berdiansk and Skadovsk, all of which have been captured by Russian forces. The World Food Programme said about 4.5m tonnes of grain was stuck in Ukrainian ports.

In other developments:

  • Russia continued strike targets far from the frontline with missiles. A 14-year-old boy was killed and a 17-year-old girl was wounded in a missile strike in the southern port of Odesa when a missile hit a dormitory, Zelenskiy said.
  • Russia’s defence ministry said a missile strike on a military airfield near Odesa destroyed a runway and a hangar with western-supplied weapons and ammunition.
  • The UN human rights office said the civilian death toll in Ukraine since 24 February had exceeded 3,000 people.
  • Boris Johnson is expected to hail Ukraine’s resistance against tyranny as an exemplar for the world as he delivers a virtual address to the country’s parliament on Tuesday. Johnson will become the first world leader to address the Verkhovna Rada since the conflict began. Britain said on Monday it would provide £300m ($375m) more in military aid to Ukraine, including electronic warfare equipment and a counter-battery radar system.
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