The Kremlin warned against a potential European Union ban on Russian oil imports, saying it would “hit everyone”, worldwide and particularly on the continent. Some EU countries are pushing for a fifth round of sanctions that would include an embargo on buying Russian crude.

Ukraine rejected a Russian demand that its forces lay down their arms on Monday and leave the besieged southern port of Mariupol. US President Joe Biden spoke with European leaders for 58 minutes on Monday, according to the White House, ahead of his trip to the continent this week. 

Biden also issued a warning to private businesses to enhance their defences against a possible Russian cyberattack.

Key developments

• Stalled elsewhere, Russia focuses on Mariupol in Ukraine Plan B
• Xi’s bet on Putin to counter US risks leaving China isolated
• EU set to line up with Biden to warn China against helping Putin
• War complicates Russia’s role in supplying commodities to China
• Russian cash in Swiss banks back in focus after Zelensky speech
• Biden says Russia weighs cyberattack, urges corporate vigilance

Biden says Russia weighing cyberattack, urges corporate vigilance

US President Joe Biden warned that Russia is weighing a cyberattack against the US and urged private businesses to enhance their defences.

Biden said in a statement that the administration had “evolving intelligence that the Russian government is exploring options for potential cyberattacks,” and said the US private sector should “harden your cyber defence immediately.”

“Most of America’s critical infrastructure is owned and operated by the private sector and critical infrastructure owners and operators must accelerate efforts to lock their digital doors,” he said.

Polish central bank offers $1bn swap line to Ukraine 

Poland will extend a swap line of as much as $1-billion to its neighbour Ukraine, the central bank said on its website, citing the potentially negative impact of Russia’s invasion on its own banking sector.

The offer of the facility takes “into account the extraordinary circumstances related to Russia’s aggression against Ukraine, which may have a negative impact on the stability of the financial system in Poland,” the central bank said.

EU says war in Ukraine shows need to enhance militaries  

The EU said Russia’s invasion of Ukraine had reinforced the need for the bloc to enhance its military capabilities, including its ability to move around troops and assets, as part of a new security strategy the bloc approved on Monday.

“Russia’s military aggression against Ukraine has confirmed the urgent need to substantially enhance the military mobility of our armed forces within and beyond the union,” concluded the Strategic Compass report, which was amended in recent weeks to account for the attack on Ukraine.

Broadly, the bloc agreed to establish by 2025 a 5,000-strong force of soldiers that can deploy swiftly for crises, with the aim of having a mechanism for willing member states to conduct a mission under the EU framework. The EU said its forces would be “complementary” to Nato, but the bloc still needs to fine-tune how it will coordinate with the alliance on which countries will prioritise which capabilities.

Russia ends dialogue with Japan over disputed islands  

Russia said it’s ending negotiations with Japan on the ownership of disputed islands because of sanctions imposed by Tokyo over its war in Ukraine.

The Russian Foreign Ministry said on Monday that Russia is also halting dialogue with Japan on economic activity around the Kuril Islands and limiting visa-free travel for Japanese citizens to the area.

The four islands, known as the Northern Territories in Japan, were seized by the Soviet Union in the dying days of World War 2. The decades-long territorial dispute has prevented the signature of a peace treaty formally ending hostilities.

Russia focuses its campaign on Mariupol in the south 

The Russian army is concentrating on seizing the Black Sea port of Mariupol after it failed in its efforts to force regime change in Ukraine, according to officials and diplomats from several countries. 

The offensive suggests the Kremlin may be adjusting its goals to focus on establishing a land corridor linking Crimea with the Donbas region of eastern Ukraine, two areas where Russia is already in control, the officials and diplomats said. 

Authorities have been pressing with limited success for humanitarian corridors to evacuate people from the city since 5 March. Presidential adviser Oleksiy Arestovych acknowledged on Friday that Ukrainian forces have no way of breaking the siege because they would have to cross at least 120km of open terrain to get there.

Russia attacked 135 hospitals, killed medics, Ukraine says 

Russian forces have attacked Ukrainian hospitals, damaging 135 and destroying nine beyond repair since the start of the war, Ukrainian Health Minister Viktor Lyashko said. Three ambulances were hit by shells, with six medical workers killed and 16 heavily wounded.

Ukraine’s state gas company says it still controls pipelines to Europe 

Yuriy Vitrenko, the CEO of Ukraine’s state-run energy company Naftogaz, said Russia is paying in hard currency to send gas through its pipeline network to Europe and Ukraine remains in control of the infrastructure.  

Ukraine’s foreign minister appeals to China to help stop Russian offensive 

Dmytro Kuleba, Ukraine’s top diplomat, highlighted his country’s long-standing relationship with China as he urged Beijing to help end the Russian offensive. 

Biden last week warned Chinese President Xi Jinping that Beijing will face consequences if it offers financial or military support to his Russian counterpart, Vladimir Putin, and the EU looks set to echo that message when it holds a virtual summit with Xi next week.  

Russia bans Facebook, Instagram under ‘extremism’ law  

A Moscow court banned Meta Platforms’ Facebook and Instagram in Russia, in what was the first use of the country’s sweeping law on “extremism” on a foreign technology company.

The presiding judge backed the prosecutor’s request to ban the social networks with immediate effect ruling them “extremist” organisations, Tass reported from the courtroom.

It marks the latest escalation against the company amid a Russian push to control access to information since invading Ukraine. Regulators previously blocked access to Facebook and Instagram. The designation would make it possible to bring criminal charges against any Meta employees in Russia, but the company has none.

UK blames Russia for hoax calls to ministers 

The UK blamed Russia for hoax calls made last week to three Cabinet ministers, calling it “standard practice” for the Kremlin as Vladimir Putin’s administration seeks to distract from its failings on the battlefield in Ukraine.

Defence Secretary Ben Wallace and Home Secretary Priti Patel both said last week they’d received calls by impostors posing as Ukrainian Prime Minister Denys Shmyhal. A similar attempt was made to reach Culture Secretary Nadine Dorries, but was unsuccessful. The UK government has launched an inquiry into the incidents.

Ukraine poultry firm asks bondholders for time 

MHP asked holders of $1.4-billion of its bonds to wait for coupon payments as it looks to preserve liquidity amid disruption to operations in the wake of Russia’s invasion.

Ukraine’s largest poultry producer is seeking approval from bondholders for a 270-day extension to a 30-day grace period following a missed payment on one of three outstanding dollar bonds on 19 March, according to a consent solicitation statement. 

Goldman, Barclays cut 2022 Russia outlook 

Economists from Barclays and Goldman Sachs Group lowered their forecasts for Russia and now see a double-digit contraction in output this year, the latest in a batch of revisions that reckon with the increased severity of sanctions over the invasion of Ukraine. 

Barclays released one of the most downbeat views yet, reversing its previous calls for growth and predicting a contraction of 12.4% in 2022 and a further decline of 3.5% the following year. Goldman downgraded this year’s forecast and now expects a slump of 10%, from a 7% drop seen earlier.

“Due to the current geopolitical conditions, we assume sanctions will be long-lasting,” Barclays economists including Brahim Razgallah said in a note.

War drives 10 million Ukrainians from homes 

Russia’s attacks on Ukraine have driven 10 million people — nearly a quarter of the population — from their homes, according to the United Nations, with growing numbers expected to head to western Europe.

While most of the displaced people have stayed in Ukraine, about 3.4 million — mainly women, children and elderly people — have sought refuge in other countries, including more than two million people in Poland, according to UN data.

Kyiv curfew tightened after mall attack 

Kyiv tightened a curfew after eight people were killed in a Russian attack on a shopping centre overnight.

Kyiv’s mayor, Vitali Klitschko, said residents would need special permits to move around Ukraine’s capital between 8pm local time on Monday and 7am on Wednesday. 

“Do not open windows, and if you go outside, protect your lungs,” he said, asking residents to wear special respirators because airstrikes had caused fires around the capital. Klitschko said six residential apartment blocks near the mall were damaged in the strike, with three now uninhabitable. Two schools and two nurseries were also damaged, he said.

Kremlin says EU oil embargo would backfire 

A possible EU embargo on Russian oil would “seriously affect the global oil market” and “hit everyone”, Kremlin spokesperson Dmitry Peskov told reporters on Monday. 

Europe would suffer much more than the US, he said, which along with the UK announced earlier this month plans to ban imports of Russian oil. The EU relies heavily on Russian gas and members are divided over the idea of introducing such restrictions.  

Italy’s Enel to exit Russia within months 

Enel, Italy’s largest utility, will exit from its Russia operations in a matter of months, Chief Executive Officer Francesco Starace said.

“With regret, I think we have to fold,” Starace said in a Bloomberg TV interview on Monday. 

Enel was one of the few large energy companies that hadn’t yet announced its intention to end operations in Russia. On Friday, Starace had said that Enel would reduce its exposure to Russia, but wasn’t planning a full exit.

Russia claims Kyiv delaying peace talks 

Progress in peace talks with Ukraine is “less than we would like”, Kremlin spokesman Dmitry Peskov said on Monday, reiterating Moscow’s allegations that Kyiv is delaying the process.

No agreements have been reached so far, he said. Kyiv accuses Russia of negotiating in bad faith in the talks as its forces continue to bombard Ukrainian cities. Talks are expected to take several more weeks at least, a Ukrainian negotiator said on Friday, noting that Russia has eased its stance on some issues.

Russia committing war crimes in Mariupol – EU  

The EU’s foreign policy chief accused Russia of carrying out war crimes with its attacks on civilians in the besieged city of Mariupol and elsewhere.

“What is happening in Mariupol is a massive war crime, destroying everything, bombarding and killing everybody in an indiscriminate manner,” Josep Borrell told reporters.

Julius Baer says it has few sanctioned clients 

Julius Baer Group said it has exposure to a number of individuals “in the low single digits” who have been sanctioned since the invasion of Ukraine, and is not taking new business from clients resident in Russia. 

“The exposure is in the form of mortgage loans at conservative lending values against residential properties in prime locations in Western Europe, as well as a marginal Lombard credit exposure fully covered by pledged liquid assets collateral,” the Swiss private bank said in a statement on Monday. 

EU should sanction Russia oil, Lithuania says 

The EU needs to keep intensifying pressure on Russia, including additional sanctions on the energy sector, Lithuania’s top diplomat said on Monday.

“I think it is unavoidable to start talking about the energy sector and we definitely can talk about oil, because it is the biggest revenue to the Russian budget and also it is quite easily replaceable because of our infrastructure and multiple suppliers,” Gabrielius Landsbergis said as he arrived at a meeting of EU foreign ministers in Brussels. 

Some other EU countries, particularly Germany, have been calling for holding off on sanctioning Russian oil. 

Australia presses India for firmer Russia stance 

Australia has joined Japan in pushing for its Quad alliance partner India to take a stronger position against Russia for its actions in Ukraine. 

“The tragic loss of lives underlines the importance to hold Russia to account,” Australian Prime Minister Scott Morrison said ahead of a meeting on Monday with India’s Prime Minister Narendra Modi.

India has stood out over its reluctance to censure Moscow. While New Delhi has supported calls for a ceasefire and a diplomatic solution, it abstained at the United Nations on votes for draft resolutions condemning Russia. India is the world’s biggest buyer of Russian weapons. 

EU set to line up with US on China 

The European Union is expected to reinforce US warnings that Beijing would face serious consequences if it tried to cushion the blow of sanctions against Russia or provide Moscow with military support. The EU and the US are coordinating ahead of a virtual EU-China summit on 1 April, people familiar with the matter say.

Ambassadors from several major EU countries are pushing for the bloc to emphasise that the war in Ukraine is potentially a defining moment for ties with China, according to a document seen by Bloomberg. They want to encourage China to take a responsible stance by highlighting its role in defending a rules-based international system.

European gas prices drop on steady Russia flow 

European natural gas prices declined to the lowest level since March 1 amid steady shipments from Russia and a forecast for warmer weather. 

Benchmark Dutch futures declined as much as 7.8% to €96.85 per megawatt-hour. The contract traded at €97.57 by 8.43am in Amsterdam.

Flows through pipelines crossing Ukraine remain stable, and Gazprom said transit is normal. Orders for Russian gas to Europe via the Nord Stream link edged higher.

Several sites in Ukraine’s west and north struck 

Russia shelled a number of sites in Ukraine, local officials said. That included a training base in the Rivne area in the country’s west, and a large shopping mall on the outskirts of Kyiv, where a fire broke out. The Ukraine prosecutor-general’s office said preliminary investigations suggested eight people were killed.

A reservoir at Sumykhimprom, a chemical plant based in the vicinity of the northern city of Sumy, was hit, the state emergency service said. It added there was an ammonia leak although it was localised and posed no immediate threat to the city.

Poland sees refugee aid costing more than €2bn

Poland sees the cost of helping Ukrainian refugees this year at more than €2.2-billion, the PAP news agency reported, citing a preliminary estimate that the country submitted to the European Commission.

The cost doesn’t include spending on education and healthcare. Representatives of the EU will visit Warsaw on Tuesday to discuss available funds that could be used to help cover the cost. More than two million people have crossed the border into Poland from Ukraine since Russia invaded on 24 February. 

Ukraine rejects Russian demand on Mariupol

 Ukraine had rejected a Russian demand for its forces to lay down their arms and leave the city of Mariupol, Deputy Prime Minister Iryna Vereshchuk was quoted as saying by Ukrainska Pravda.

“There can be no question of surrendering or assembling weapons,” she was cited as saying. “We have already informed the Russian side about this.” Vereshchuk said Russia should instead let residents leave and deliver humanitarian aid to those who want to stay. 

Russia’s Defence Ministry had issued the ultimatum for Monday morning, saying all troops and foreign fighters should leave the city so that humanitarian convoys with food, medicines and other essentials to come in. DM