Will Ukraine cut off Europe energy from Russia?

Ukraine said it’s open to halting Russian natural gas supplies to Europe through the country as it plans sanctions on President Vladimir Putin’s government as part of its battle against pro-Russian separatists.

The list of possible sanctions includes a “complete or partial ban on the transit of all resources,” Prime Minister Arseniy Yatsenyuk told reporters in Kiev today in response to a question about halting gas flows. Other measures may include a ban on Russian planes overflying Ukraine, he said.

“There’s no doubt that Russia will continue its course -- started a decade ago--aimed at banning imports of Ukrainian goods, limiting cooperation with Ukraine, pressure and blackmail,” Yatsenyuk said. “In the most negative scenario for Ukraine, losses during the first year may reach $7 billion, not only because of sanctions but also because of the Kremlin’s aggressive policy”

The Ukrainian move comes two days after Russia banned the import of food from the U.S., the European Union and other countries in response to sanctions over the Ukraine conflict. Ukraine’s military said today it’s continuing to close in on rebel strongholds in the east of the country, amid rising casualties.

Ukraine transported 86.1 billion cubic meters of Russian natural gas (NYMEX:NGU14) and 15.6 million metric tons of oil last year, according to a February bond prospectus. That’s about half of Russia’s total gas exports, though less than 7 percent of oil shipments. Russian producers plan to ship about 14 million tons of crude across Ukraine this year, Igor Dyomin, a spokesman for Russia’s oil pipeline operator, OAO Transneft, said by phone.

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