London CNN Business  — 

Germany is ready to support a European ban on imports of Russian oil, and won’t be “blackmailed” by Moscow into paying for natural gas in rubles.

Speaking to CNN’s Julia Chatterley on Monday, finance minister Christian Lindner said Germany would agree any new sanctions on Russia with its partners in the European Union.

“Germany stands ready for new sanctions, including an oil embargo,” he said.

The European Union has already agreed to phase out Russian coal imports as part of a fifth wave of sanctions imposed on Russia over its invasion of Ukraine.

But the bloc has found it much harder to reach consensus on joining a US-led embargo on Russian oil despite weeks of talks. Hungary reiterated its opposition to an oil embargo again on Monday, Reuters reported.

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These maps show how natural gas is behind Russia's power
03:25 - Source: CNN

Lindner said he did not want to speculate on whether some EU member states, such as Hungary, would have to be given exemptions or carve outs from an oil embargo.

“I can assure you that Germany is ready to reduce oil imports, we know others are considering this question carefully,” he added.

Last year, Russia accounted for about 27% of EU oil imports. It also supplied about 40% of Europe’s natural gas. EU leaders have already promised to slash Russian gas imports by 66% this year, and to break the bloc’s dependency completely by 2027.

“We have prepared ourselves to be less dependent on Russian energy imports,” Lindner said. “We can reduce the imports, starting with coal, then oil. It will take more time to be independent from Russian natural gas imports, but we will continue so in the end we will be completely independent from Russia.”

Moscow raised the stakes in a tense energy standoff with Europe last week by cutting off supplies of natural gas to Poland and Bulgaria. State gas giant Gazprom said neither country had agreed to President Vladimir Putin’s demand that customers in “unfriendly” countries must open two accounts at Gazprombank — one in euros and the second in rubles, from which payments for the gas would be made.

The vast majority of Gazprom’s contracts with its European customers stipulate payment in euros or dollars. The Kremlin’s ultimatum regarding ruble payments is widely seen as a move to bolster its war chest and boost the Russian currency.

Is Germany next?

German gas distributor Uniper said last week it would continue to pay for its Russian supplies in euros but added that it believed a “payment conversion compliant with sanctions law” was possible. It said it was examining the matter carefully in close coordination with the German government.

Lindner said he expected Germany’s utilities to honor the terms of their contracts, which require payment in euros or dollars.

“Germany can’t be blackmailed, we know there is a dependency on natural gas from Russia, it is a reality. We need time to reduce this dependency,” he told CNN. “This is the situation of the contracts and we do not change because Putin needs rubles for his war chest.”

Germany has reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it needs to keep buying from Moscow at least until next year to avoid a deep recession.

Uniper said that it cannot cope without Russian gas in the short term.

“This would have dramatic consequences for our economy,” it said in its statement.

Germany’s central bank last week said an abrupt halt would push the economy into a deep recession. About 550,000 jobs and 6.5% of annual economic output could be lost across this year and next, according to an analysis by five of the country’s top economic institutes.