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Tags: oil | energy | Russia | sanctions

FT: Oil Industry Lines Up Against US Sanctions on Russia

FT: Oil Industry Lines Up Against US Sanctions on Russia
(Dreamstime)

By    |   Tuesday, 18 July 2017 11:57 AM

U.S. sanctions on Russia could have “unintended consequences” that hurt American jobs and U.S. energy projects throughout the world, the industry warned. The Senate last month approved sanctions with a 97-2 vote, and the House of Representatives is now considering the bill.

The legislation would block U.S. individuals and companies from providing goods, services or technology for deepwater, Arctic offshore or shale projects where Russian companies are “involved,” according to the Financial Times.

Oil executives and industry representatives say the proposed rules are so broad that they could hurt the competitiveness of U.S. companies and possibly hinder oil and gas production in countries other than Russia.

“The planned sanctions extend the measures taken against Russia following its annexation of Crimea in 2014,” the newspaper reported. “They were approved to punish Russia for its alleged interference in the 2016 US election, and were added to a Senate bill tightening restrictions on Iran.”

The sanctions may negatively affect BP’s $28 billion Shah Deniz 2 gas development in Azerbaijan, where a Russian oil company subject to existing sanctions has a 10 percent stake. While the project doesn’t have any U.S. partners, it relies on equipment and services from U.S. companies.

Shah Deniz 2 is intended to supply gas to Europe to compete with Russian supplies, which shows how the sanctions could backfire on U.S. geopolitical strategy.

The sanctions may also interfere with Chevron’s $37 billion expansion of the Tengiz project in Kazakhstan.

U.S. companies want the House to revise the curbs to narrow their scope.

“In terms of where new sanctions take us, there is some uncertainty in what is written,” a senior executive at a western oil company with projects in Russia told the FT. “If they are to make it through Congress, I would expect the language to be tightened up in some areas to clear it up.”

Meanwhile, Russia reserves the right to take retaliatory measures against the U.S. for its "illegal seizure" of Russian diplomatic property, its Foreign Ministry said in a statement on Tuesday. Russia's Deputy Foreign Minister Sergei Ryabkov and U.S. Undersecretary of State Thomas Shannon met on Monday to discuss the diplomatic row.

Former President Barack Obama in December ordered the seizure of two Russian diplomatic compounds in New York and Maryland, and expelled 35 Russian diplomats over what he said was their involvement in hacking the 2016 U.S. presidential election campaign, which Russia denies.

U.S. intelligence officials have said that the compounds doubled as surveillance outposts for Russian spies, NBC News reported.

"Russia stressed that if Washington does not address this and other concerns, including persistent efforts to hinder the operation of Russia’s diplomatic missions, Russia has the right to take retaliatory measures in accordance with the principle of reciprocity," the statement said.

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U.S. sanctions on Russia could have "unintended consequences" that hurt American jobs and U.S. energy projects throughout the world, the industry warned.
oil, energy, Russia, sanctions
458
2017-57-18
Tuesday, 18 July 2017 11:57 AM
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