| By NATALIYA VASILYEVA
Updated: 2 hours ago
MOSCOW (AP) — President Vladimir Putin on Thursday lamented the
latest round of U.S. sanctions against Russia, saying they will stalemate
bilateral relations and hurt not only Russian but also American businesses.
Russia's benchmark MICEX was down 2.9 percent
in late afternoon trading Thursday upon news of the sanctions while Russia's
biggest oil company, Rosneft, was nearly 5 percent down and second-largest oil
producer was trading 9 percent lower.
Putin's comments came hours after President
Barack Obama announced broader sanctions against Russia, targeting two major
energy firms including Rosneft, a pair of powerful financial institutions,
eight weapons firms and four individuals. The increased U.S. economic pressure
is designed to end the insurgency in eastern Ukraine that is widely believed to
be backed by the Kremlin.
The U.S. 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 the pro-Russia insurgents who have destabilized eastern
The insurgents have been fighting government
troops in eastern Ukraine for four months now in a conflict that the U.N. says
has killed over 400 people and has displaced tens of thousands. The conflict
took off shortly after Russia annexed the mostly Russian-speaking Ukrainian
peninsula of Crimea.
In televised comments Thursday, Putin said
the sanctions are "driving into a corner" relations between the two
nations as well as the interests of American companies and "the long-term
national interests of the U.S. government and people."
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 U.S. entities.
Moscow-based investment bank Sberbank-CIB
said in a note to investors that Russian companies cannot replace long-term
loans from the U.S. immediately.
"While Asian and Middle Eastern money
can step in to fill the gap, we expect that this will take time," the note
said, adding that borrowing will also cost more.
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," Putin said in Brazil, referring to Exxon's
potential exploration on the Russian Arctic shelf. "So, what, the United
States does not want it to work there now?"
Russia's foreign ministry dismissed the
sanctions "bullying" and signaled that it was ready to push back.
"We consider the new round of American
sanctions against Russia as a primitive attempt to take vengeance for the fact
that events in Ukraine are not playing out to the tune of the script of
Washington," the ministry said in a statement.
Prime Minister Dmitry Medvedev in televised
remarks said the sanctions are throwing Russia's relations with the West
"back to the 1980s" and added that Russia "will have to pay more
attention to military and security spending."
Putin made no mention of the additional
sanctions levied Wednesday 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
But the foreign ministry did lash out at the
EU's new sanctions, accusing Europe of "giving in to the bullying of the
In Moscow, the Association of European
Businesses on Thursday expressed its "strong disagreement" with the
new U.S. sanctions, saying "these companies and banks are reliable and
long-term partners of many European companies," and said the curtailing of
the activities of the EBRD and the EIB in Russia might "affect the general
reliability of these two institutions in other markets."
Igor Sechin, Rosneft's CEO and a close
confidante of Putin, dismissed the U.S. sanctions as "unfounded,
subjective and unlawful," adding that his company "had no role in the
events in Ukraine."
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.
Rosneft posted $2.5 billion in net profit in
the first quarter of the year and about $3.5 billion in free cash flow.
"This is the wrong way," Sechin
said, referring to the sanctions, in comments carried by Interfax. "But I
think God sees everything and will put things right."
your so much concern about US and its welfare after seeing your sympathetic
will stalemate bilateral relations and hurt not only Russian but also American
businesses.” I wish these people of West and EU understood your intricate
sincerity and Foreign Policy.
and Financial Wizards are of the opinion that the West and EU together would
gradually get you to beg for mercy with your nation on your throat for what you
have done. You have firepower and armaments to confront but not the silent
WMDS they are using which are much more devastating than all your firepower together.
heard any sound of those busting on your nation? No, you have not but soon it
would cripple the entire nation both economically and financially, where upon
it would compel you to beg mercy. Just observe yourself you are lamenting already.
After some more sanctions, you would have to cry. The WMDS in use are invisible punching and
you have very little time left. Therefore, surrender and hand handover the land
you annexed and withdraw your fake game players the terrorists from Ukraine and
let the Independent sovereign country have the freedom to live and be happy as
they like to live never interfere violating International Law as you being a
founder member of UN have done on two counts. Isn’t it a shame for the Russian
what you Mr. PUTIN have done, have lost all the credibility your predecessors
amassed for the great nation. You have made yourself a black sheep among the
Russian Nationals. If you delay more trouble awaits you and your nationals.