President Obama has increased sanctions intended to hurt selected segments of the Russian economy, he announced Wednesday night. The new sanctions will prevent some Russian companies — including oil and gas producers — from obtaining long-term loans from American debt markets.
“I’ve repeatedly made it clear that Russia must halt the flow of weapons and fighters across the border into Ukraine,” the president said Wednesday in a press statement addressing his ever-increasing list of international concerns. “So far, Russia has failed to take any of the steps that I mentioned.”
The Treasury Department’s full list of sanctions on “entities within the financial services and energy sectors of Russia, against arms or related materiel entities, and those undermining Ukraine’s sovereignty” is here. According to the department, the U.S. targets include two Russian financial institutions, two energy firms, and eight defense technology entities. In addition, the U.S. is now sanctioning four new Russian government officials, including a senior Russian Federal Security Service official.
The energy sanctions target Russian state-owned oil giant Rosneft, as well as OAO Novatek, which according to the Treasury Department is the country’s third-largest independent natural-gas producer.
The energy-related sanctions restrict financing from within the U.S., limiting the two companies’ ability to tap U.S. capital markets by barring access to debt with maturity of 90 days or longer.
Treasury also didn’t rule out taking more aggressive steps against Russia’s energy sector in the future.
“[W]e have not blocked the property or interests in property of these companies, nor prohibited transactions with them beyond these specific restrictions. However, the scope of the prohibited transaction types and the number of energy companies may be expanded … if the Russian government does not take steps to de-escalate the situation in Ukraine,” Treasury said.
Elizabeth Rosenberg, a former Treasury Department adviser who is now with the Center for a New American Security, said the newly announced measures are significant.
“What this does, effectively, is start to tighten a noose around Russia,” said Rosenberg, who directs the think tank’s Energy, Environment, and Security Program. “It will chill the environment. It will make companies wary of doing business with them.”
Exxon has major energy-development partnerships with Rosneft in Russia. Exxon did not provide immediate comment on the effect of the U.S. action.
The U.S. is coordinating sanctions with European allies, though Europe has not gone as far in its sanctions, only blocking loans for new Russian projects. The New York Times reports that German Chancellor Angela Merkel and President Obama spoke Tuesday by phone to synchronize action against the Kremlin. On July 3, Obama and Merkel spoke, and, according to a White House statement, “agreed that the United States and Europe should take further coordinated measures to impose costs on Russia if it does not take steps toward de-escalation in short order.” That was two weeks ago.
The Obama administration has already launched a series of sanctions against Russia since earlier this year — mostly against wealthy Russian influentials — when the crisis in Ukraine that led to Crimea being annexed by Russia began.
During his statement, the president also said that the U.S. will “continue to encourage diplomatic efforts” to reach a cease-fire in the conflict in Israel. He added that there are still “significant gaps” within the international community on coming to a deal over Iran’s nuclear program.