Russia warns on oil import ban as little progress is made at Ukraine talks

Fears of an energy war between Russia and the West grew on Tuesday after the United States pushed its allies to ban Russian oil imports as punishment for Moscow’s invasion of Ukraine, where talks on humanitarian corridors made little progress.

Russia warned it could stop the flow of gas through pipelines from Russia to Germany in response to Berlin’s decision last month to halt the opening of the controversial new Nord Stream 2 pipeline. Russia supplies 40% of Europe’s gas.

“We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline,” Russian Deputy Prime Minister Alexander Novak said on Monday.

Novak also warned that oil prices could more than double to $300 a barrel if the United States and its allies banned imports of Russian oil, a crucial source of revenue after the country was effectively frozen out of Western financial markets.

Analysts at Bank of America however said that if most of Russia’s oil exports were cut off there could be a shortfall of 5 million barrels per day (bpd) or more, pushing prices as high as $200. 

Oil prices see-sawed near 14-year highs on Tuesday, with Brent crude futures up $1.06, or 0.9%, at $124.27 a barrel at 0223 GMT, after trading as high as $125.19. 

U.S. President Joe Biden held a video conference call with the leaders of France, Germany and Britain on Monday as he pushed for their support to ban Russian oil imports.

But if need be, the United States was willing to move ahead without allies in Europe, two people familiar with the matter told Reuters. Many countries on the continent are heavily reliant on Russian energy. 

Russia’s invasion, the biggest attack on a European state since World War Two, has created 1.7 million refugees, a raft of sanctions on Moscow, and fears of wider conflict as the West pours military aid into Ukraine.

Ukraine’s military intelligence said on Tuesday that Ukrainian forces killed a Russian general near the besieged city of Kharkiv, the second Russian senior commander to die in the invasion.

Major General Vitaly Gerasimov, first deputy commander of Russia’s 41st army, was killed on Monday, the Chief Directorate of Intelligence of Ukraine’s defence ministry said in a statement.

Russia’s defence ministry could not be immediately reached for comment and Reuters could not verify the report.

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

Japan tightened its sanctions on Tuesday, freezing the assets of an additional 32 Russian and Belarusian officials and executives of companies with close ties to the government. 

Estee Lauder Companies Inc joined a long list of firms exiting Russia, suspending all commercial activities and closing all its stores in the country.

Humanitarian corridors

Sieges and the bombing continued as Kyiv rejected possible humanitarian corridors to Russia and Belarus, but said some limited progress had been made on agreeing logistics for the evacuation of civilians.

In the city of Irpin, on the northwest edge of Kyiv, fleeing residents ran with their young children in strollers, or cradling babies in arms, while others carried pet carriers, and plastic bags and suitcases.

“It’s like a disaster, the city is almost ruined, and the district where I’m living, it’s like there are no houses which were not bombed,” said one young mother, holding a baby beneath a blanket, while her daughter stood by her side.

“Yesterday was the hardest bombing, and the lights and sound is so scary, and the whole building is shaking.”

Besides corridors to Russia, Moscow has proposed giving the residents of the Ukrainian cities of Sumy and Mariupol the choice of moving elsewhere in Ukraine on Tuesday, setting a deadline in the early hours for Kyiv to agree, Russian news agencies reported. 

More than 1.7 million Ukrainians have fled to Central Europe since the conflict began on Feb. 24, the United Nations refugee agency said on Monday.

After the third attempt to ease the bloodshed at talks in Belarus, a Ukrainian negotiator said that although small progress on agreeing logistics for the evacuation of civilians had been made, things remained largely unchanged.

Kremlin spokesman Dmitry Peskov told Reuters Moscow would halt operations if Ukraine ceased fighting, amended its constitution to declare neutrality, and recognised Russia’s annexation of Crimea and the independence of regions held by Russian-backed separatists.

A Russian strike on a bread factory killed 13 in the town of Makariv in the Kyiv region, Ukrainian officials said. Reuters could not verify the details. Russia denies targeting civilians.

In the encircled southern port city of Mariupol, hundreds of thousands of people remained trapped without food and water under regular bombardments.

In the eastern city of Kharkiv, police said the death toll from the Russian bombardment was 143 since the start of the invasion. It was not possible to verify the toll.

Ukraine said on Monday its forces had retaken control of the town of Chuhuiv in the northeast after heavy fighting and of the strategic Mykolayiv airport in the south. Neither could immediately be verified.

A senior U.S. defence official said Putin had now deployed into Ukraine nearly 100% of the more than 150,000 forces that he had pre-staged outside the country before the invasion.

Reporting by Reuters bureaus; Writing by Costas Pitas and Stephen Coates; Editing by Rosalba O’Brien, Michael Perry and Raju Gopalakrishnan