EU fails to agree Russian oil ban as Orban digs in

Kyiv — Ukrainian and Russian forces battled on Monday on the outskirts of Sievierodonetsk, the last city still held by Kyiv in Ukraine's Luhansk province and the focus of Moscow's offensive in the country's east.

But even as the Russian onslaught raged, EU leaders made clear they would fail to agree on a Russian oil import ban at a summit in Brussels, prompting swift criticism from Ukrainian President Volodymyr Zelensky, who said they were too soft on Moscow.

Zelensky urged the EU to end internal “quarrels” that he said only encourages Moscow and urged the  bloc to adopt more sanctions against Russia.

Russian shelling has reduced much of Sievierodonetsk to ruins, but the Ukrainian defence has slowed the wider Russian campaign across the Donbas region.

Luhansk region governor Serhiy Gaidai said Russian troops had advanced into Sievierodonetsk's southeastern and northeastern fringes.

As the battlefield struggle ground on, EU countries meeting in Brussels to discuss more sanctions failed to agree on a ban of Russian oil imports, despite last-minute haggling before the two-day summit.

The EU has rolled out five packages of sanctions against Russia since its troops invaded Ukraine on February 24, but an agreement on oil sanctions has proved elusive because so many countries depend on Russian crude.

“There is no compromise for this moment at all,” said Hungarian Prime Minister Viktor Orban, whose country has been the main holdout for a deal.

After failing to capture Ukraine’s capital, Kyiv, in March, Russia said the focus of its “special military operation” was now to seize the entire Donbas region, consisting of two provinces, Luhansk and Donetsk, that Moscow claims on behalf of separatist proxies.

Russian foreign minister Sergei Lavrov said on Sunday the “liberation” of the Donbas was an “unconditional priority”.

Capturing Sievierodonetsk and its twin city Lysychansk on the opposite bank of the Siverskyi Donets river would give Russia effective control of Luhansk and allow the Kremlin to declare some form of victory after more than three months of death and destruction.

But by focusing its effort on a battle for the single small city, Russia could leave other territory open to Ukrainian counterstrikes.

Kyiv says its forces pushed back Russian troops in recent days to defensive positions in three villages — Andriyivka, Lozove and Bilohorka — all on the south bank of the Inhulets River that forms the border of Kherson province, where Moscow is trying to consolidate its control.

A French journalist, Frederic Leclerc-Imhoff of television channel BFM, was killed near Sievierodonetsk on Monday when shelling hit the vehicle he was travelling in during an evacuation of civilians. French foreign minister Catherine Colonna, who was visiting Ukraine at the time, demanded an investigation.

In Brussels, Estonian Prime Minister Kaja Kallas said it was more realistic to expect an agreement on an oil embargo in a few weeks, hopefully at the EU’s next summit on June 23-24.

Before the summit, German economy minister Robert Habeck expressed fears that EU unity was “starting to crumble”.

A draft text seen by Reuters — which may still be revised — would confirm that a sixth package of sanctions will include a ban on seaborne oil imports, with pipeline oil supplied to landlocked Hungary, Slovakia and the Czech Republic to be sanctioned at some later point.

However, the leaders will task diplomats and ministers to agree how it would work, including by ensuring fair competition between those still getting Russian oil and those cut off.

Some denounced the lack of movement.

“We’re forgetting the big picture,” said Latvian Prime Minister Krisjanis Karins. “It’s only money. The Ukrainians are paying with their lives.

“We can and we must support them, if only out of self-interest, because only when Russia is defeated can we in Europe feel safe.”

Zelensky questioned the lack of EU resolve. “Why are you dependent on Russia, on their pressure, and not vice versa? Russia must be dependent on you. Why can Russia still earn almost a €1bn a day by selling energy?” he said in an address to EU leaders.

“Why are terrorist banks still working with Europe and the global financial system? Serious questions.”

EU steps have been blocked by Hungary's refusal to agree to a ban on imports of Russian oil, which it receives through the huge Soviet-era “Friendship” pipeline that runs across Ukraine.

There is broad agreement on the rest of a package, including cutting Russia’s biggest bank, Sberbank, from the Swift messaging system, banning Russian broadcasters from the EU, and adding people to a list whose assets are frozen.

In the Netherlands, GasTerra, which buys and trades gas on behalf of the Dutch government, said it would no longer receive gas from Russia’s Gazprom from Tuesday after refusing to agree to Moscow’s demands for payment in roubles.

Grain

Western leaders have blamed Russia for holding the world to ransom by blockading Ukrainian ports, and the UN, which says a global food crisis is deepening, is trying to broker a deal to unblock Ukraine’s grain exports.

Russian President Vladimir Putin said Moscow was ready to facilitate grain exports from Ukrainian ports if sanctions were lifted. Russia could export significant volumes of fertilisers and agricultural products, he said.

Putin, in talks with Turkish President Recep Tayyip Erdogan, said Russia was ready to facilitate unhindered export of grain from Ukrainian ports in co-ordination with Turkey, the Kremlin said.

“Emphasis was placed on ensuring safe navigation in the Black and Azov seas and eliminating the mine threat in their waters,” the Kremlin said of Putin's call with Erdogan.

Nato secretary-general Jens Stoltenberg said it was Russia’s invasion that had caused food and energy prices around the world to rise, not Western sanctions.

“This has imposed suffering on hundreds of millions of people around the world,” he said in an interview with Spanish radio Cope.

Reuters