Heavy industry giants look like the first entities to claim they will be damaged by sanctions against Russia. Multi-billion dollar steel producer Arcelor Mittal has reportedly opposed the EU’s Russia sanctions outright; not because its own business will be affected, but because of the damage sanctions could do to European Union. ‘Sanctions do not ‘bring us forward’, a spokesman told Reuters.
Back in April, before the EU issued its latest round of sanctions, oil giants BP, Exxon and Total were already considering the damage that sectoral sanctions on energy might do to them. A story in the Telegraph mentioned that the US leadership was ‘aiming to ring-fence BP, Shell and France’s Total, among others, from collateral damage or retaliatory action.’
So called effective sanctions on Russia, ie those that would damage Russia more than they would damage the US and Europe, would specifically target new oil and gas projects, leaving existing fields to keep producing and keep the dollars rolling in, damage Moscow’s long term goals of being a bigger energy provider and maintain energy security in Europe.
For those with a subscription, there is an interesting piece in the WSJ on how sanctions are making life awkward for BP and Total in Russia. “To ensure access to Russia’s vast reserves—and avoid political tangles that can ensnare companies in the country that don’t have Kremlin connections—big Western oil companies including BP, Total SA and Exxon Mobil Corp. have allied themselves with loyalists of Russian President Vladimir Putin.”
Some of the Putin loyalists and his closest allies and organisations they represent have ended up on sanctions lists. Igor Sechin, a former government official and a close ally of Putin is the Executive Chairman of Rosneft, the state oil company, was added to the list in April. Several companies connected to Gennady Timchenko, Putin’s former Judo partner, are on the US list. Timchenko himself was added to the list in March.