U.S. Widens Sanctions Against Russia - Targets Rosneft, Novatek, Others

July 17, 2014

President Barack Obama imposed the biggest package of U.S. economic sanctions yet on Russia on Wednesday, hitting Russia's largest oil producer Rosneft and other energy, financial and defense firms, with what he called significant but targeted penalties. The extent of the sanctions against key parts of the Russian energy and financial industry, including Gazprombank, was intended to serve notice to Moscow that its refusal to curb violence in eastern Ukraine has consequences.

The targeted companies also include Russia's second-largest gas producer, Novatek, Vnesheconombank, or VEB, a state-owned bank that acts as payment agent for the Russian government, and eight arms firms.

The U.S. Treasury Department said the measures effectively closed medium- and long-term dollar funding to the two banks and energy companies. But the sanctions did not freeze those four companies' assets, or otherwise prohibit U.S. firms or companies from doing business with them.

It is the first time the United States has imposed such narrowly targeted measures as it seeks the maximum impact on Russia, a huge energy producer, while avoiding any immediate shock to global oil markets or U.S. and EU companies.

Russian President Vladimir Putin, speaking in Brasilia, said the sanctions would damage U.S. energy companies, and bring relations with Russia to a "dead end."

Copyright, Reuters, 2014.