The EU will propose a phased out ban on Russian oil imports as part of a fresh round of sanctions against Russia for its military offensive in Ukraine, sources said on Sunday.

The European Commission, which draws up sanctions for the bloc, is currently preparing a text that could be put to the 27 member states as early as Wednesday, diplomats said.

Several diplomats said the ban on oil was made possible after a U-turn by Germany, which had said the measure would do too much harm to its economy.

EU foreign policy chief Josep Borrell said Russia was intensifying its attacks in Ukraine, making new sanctions “absolutely essential”.

“We must use our economic and financial abilities to make Russia pay the price for what it’s doing,” he said.

The commission will propose introducing the ban over six to eight months to give countries time to diversify their supply, the sources said.

The ban requires unanimous backing and could yet be derailed, with Hungary expected to mount strong opposition as it is dependent on Russian oil and close to the Kremlin.

Other countries are worried that a ban on oil would increase prices at the pump when consumer prices are already sharply on the rise because of the war.

“We must be very attentive to market reactions,” one official told AFP on condition of anonymity.

“There are solutions and we will get there in the end, but we must act with great care.”

‘Little impact’

Even though Russia exports two-thirds of its oil to the EU, the US has expressed doubts about an outright ban.

Treasury Secretary Janet Yellen warned that it might have little impact on Russia because it would push up prices for its remaining exports.

EU energy ministers were set to discuss the ban at talks on Monday in Brussels, though they would not sign off on the decision.

This sixth package of anti-Russian measures will also target the country’s largest bank, Sberbank, which will be excluded from the international Swift messaging system, the diplomats said.

The EU had already banned imports of Russian coal, but Poland and the Baltic states called for an oil embargo as well.

Gas imports from Russia will remain untouched, with hugely dependent Germany promising to wean itself off Russian gas by mid-2024.

The reliance of Europe’s biggest economy on Russian energy has been exposed as an Achilles’ heel as Western allies scramble to punish Russian President Vladimir Putin for his attack on Ukraine.

Russia says could seize assets of ‘hostile’ countries

Russia suggested on Sunday that it could seize the Russian-based assets of countries it deems hostile in retaliation for a US proposal to sell off Russian oligarchs’ assets and pay the proceeds to Ukraine.

“As far as companies based in Russian territory are concerned whose owners are citizens of hostile countries and where the decision has been taken” to seize Russian assets, “it is fair to take reciprocal measures and confiscate assets,” said the speaker of Russia’s lower house of parliament, Vyacheslav Volodin.

“And the proceeds from the sale of these assets will be used for our country’s development,” he said on his Telegram channel.

Volodin accused “a certain number of hostile countries – Lithuania, Latvia, Poland and even the United States” – of flouting international law and “resorting to pure theft”.

Volodin said that “today, Russian businessmen are buying foreign companies operating in Russia, and purchasing the shares of partners who want to quit our market”.

He urged “hostile” countries to “act in a civilised manner and respect international law.”

Volodin’s remarks came after US President Joe Biden announced a proposal to ratchet up economic pressure on Russia, with enhanced seizure and forfeiture procedures allowing oligarchs’ seized assets to be “sold off” to “remedy the harm Russia caused and to help build Ukraine.”

“A dangerous precedent has been set, which could boomerang back on the US itself,” Volodin said.

“This decision won’t affect our country’s economy. The yachts, villas and other assets of rich [Russian] citizens contribute nothing to the development” of Russia, he said.