Countries that agree to Putin's demand for energy payments in rubles would be violating sanctions, the European Union warns

• While Putin has called for energy payments to be made in rubles, the EU warns this would violate sanctions.
• The EU also said that trading in rubles would give Russia total control over energy transactions and exchange rates.

President Vladimir Putin has called for "unfriendly countries" to pay for Russian energy commodities using rubles or risk being cut off, but the European Union has warned that member states who do so will be violating sanctions.

The Commission said making payments in the Russian currency would breach the sanctions the EU has imposed on Russia's central bank and its proxies.

The European Commission, a branch of the EU, concluded that countries shouldn't abide by Putin's call for rubles as the new process would give Russia total control over transactions, as well as leverage over currency exchange rates, per Bloomberg.

The Commission's analysis of Putin's edict found that it would create a new legal situation, and significantly change the current transaction procedure, a source told Bloomberg.

Additionally, the new process would introduce new costs to the buyer, which would be subject to Russia's preferences.

Most member states have said they won't be paying for any Russian energy supplies in rubles, however.

Meanwhile, Russia is becoming increasingly cut off from the global financial system. The bulk of its central bank's $600 billion in foreign currency reserves have been frozen.

Last week, Russia transferred rubles to make bond payments after the US Treasury blocked its attempt to pay in dollars.

Now, in the latest sign that Moscow is nearing a historic default, holders of Russian bonds have said they cannot accept rubles as payment.

Rating agency S&P Global last week put Russia in the "selective default" category, and in May, the world's biggest oil traders are set to cut out Russian oil purchases, according to a report.