More Russian companies added to the list of Russian Sanctions
“The US government has now added more Russian companies to the list of sanctions, among them major energy companies such as Rosneft’ NK OAO (MCX:ROSN) (OTCMKTS:RNFTF) and several Russian banks,” observed lars Christensen, chief analyst at Copenhagen-based Danske Bank A/S (CPH:DANSKE) (OTCMKTS:DNSKY).
Added to the official sanction list are five individuals and fifteen entities. Included on this list is Oleg Savelyev, Russia’s Minister of Crimean Affairs, Igor Shchegolev, a top aide to Russian President Vladimir Putin, and Sergey Beseda, a commander in the FSB, Russia’s federal security service. Companies of note include banks such as Vnesheconombank, a key payment agency for the government, and Gazprom OAO (ADR) (OTCMKTS:OGZPY) (MCX:GAZP), the nation’s third largest bank. As well as the aforementioned Rosneft’ NK OAO (MCX:ROSN) (OTCMKTS:RNFTF), the nation’s largest oil producer, Novatek OAO (MCX:NVTK) (OTCMKTS:NVATY), Russia’s second largest gas producer, was also sanctioned.
Russian Sanctions shut down funding in US dollars
The Russian Sanctions effectively shut down medium and long term funding in US dollars and further crimp the already limping Russian economy. While the sanctions were harsh, Washington did not freeze assets, shut down short term financing the companies need for day to day operations nor did they restrict US firms from doing business.
The move comes as European officials are preparing to announce Russian sanctions and new revelations are about to surface that official Russian intelligence operatives hacked into the Nasdaq and placed a digital time bomb in the computer system.
Russian officials were quoted as denouncing the new round of sanctions. Putin was quoted in Reuters as saying US sanctions would hurt US energy companies while bringing relations to “a dead end.” Russian Prime Minister Dmitry Medvedev said the sanctions were evil and would not “bring anyone to their knees.”
“The expanded sanctions in our view are likely to have a further damaging effect on the Russian economy,” Christensen said. “We believe that the Russian economy is already in recession and the continued downturn in the economy is likely to put renewed pressure on Russian markets.”
The Russian MICEX index was down nearly 3 percent in overnight trade and the Russian Ruble tumbled nearly 4 percent. European markets and US markets were not hit to the same degree. The French market was down hardest, negative by just under under 1 percent with US futures showing slight declines in pre-market trading.