Putin condemns fresh US sanctions

Putin condemns fresh US sanctions

President Vladimir Putin has lamented the latest round of US sanctions against Russia, saying they are stalemating bilateral relations and hurting not only Russian but also American businesses.

Russia’s benchmark MICEX plummeted 2.6% at the opening today upon news of the sanctions while Russia’s biggest oil company, Rosneft, was nearly 5% down.

Mr Putin’s comments came hours after President Barack Obama announced broader sanctions against Russia, targeting two major energy firms, a pair of powerful financial institutions, eight weapons firms and four individuals. The increased US economic pressure is designed to end the insurgency in eastern Ukraine that is widely believed to be backed by the Kremlin.

The US penalties, however, stopped short of the most stringent actions the West has threatened, which would fully cut off key sectors of Russia’s oil-dependent economy. But officials said those steps were still on the table if Russia fails to abide by the West’s demands to stop its support for pro-Russia insurgents who have destabilised swathes of eastern Ukraine.

Pro-Russia insurgents have been fighting government troops in eastern Ukraine for four months now in a conflict that the UN says has killed over 400 and displacing tens of thousands. The conflict took off shortly after Russia annexed the mostly Russian-speaking Ukrainian peninsula of Crimea.

In televised comments, Mr Putin said the sanctions are “driving into a corner” relations between the two countries as well as the interests of American companies and “the long-term national interests of the US government and people”.

Mr Putin warned Washington that the sanctions will backlash against American companies working in Russia.

The most noticeable companies on the list are Rosneft and Russia’s largest independent gas producer Novatek. Both are now barred from getting long-term loans from US entities.

Rosneft has a multibillion-dollar deal with ExxonMobil, which among other things allowed Exxon to develop lucrative oil fields in Russia.

“We gave this American company the right to work on the shelf,” Mr Putin said, speaking during a state visit in Brazil. “So, what, the United States does not want it to work there now?”

Mr Putin made no mention of the additional sanctions levied by the 28-nation European Union, which urged the European Investment Bank to sign no new financing agreements with Moscow and was suspending operations in Russia financed by the European Bank for Reconstruction and Development. European nations have much closer energy and other economic ties with Russia and have not imposed as tough sanctions as the United States.

Igor Sechin, Rosneft’s CEO and close confidante of Mr Putin, dismissed the sanctions as “unfounded, subjective and unlawful,” adding that his company “had no role in the events in Ukraine”.

Mr Sechin said their lawyers have to yet to explore how hurtful the sanctions could be but added that the company has enough money in reserves to refrain from taking out new loans for a while.

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