World Economy

Russia’s Gazprom Hit by Ban

Russia’s Gazprom Hit by BanRussia’s Gazprom Hit by Ban

Russia's Gazprom Bank and oil producer Gazprom Neft will fall under new sanctions approved by the European Union. The sanctions reportedly include a new ban on raising capital in Russia.

The sanctions were agreed against Russia for its alleged role in the Ukrainian crisis, the diplomatic source said, Reuters cited an EU diplomat as saying.

All Russian state-controlled companies with assets of more than one trillion Rubles ($27b) that receive more than half their revenue from “the sale or transportation of crude oil or petroleum products” will be hit by the ban, the report said.

In addition to Gazprom Neft, the oil subsidiary of Russian gas giant Gazprom, Russia’s largest oil group -Rosneft and Transneft pipeline company- would be potentially blacklisted. However, the sanctions will not apply to privately-owned Russian oil groups such as Lukoil and Surgutneftegas.

The sanctions will also include an expansion of the EU travel ban list against certain individuals, as well as asset freezes, credit restrictions against Russian companies, and export bans on dual use goods, the EU diplomat told the agency.

Chiefs of Russian companies will be added to the list, along with oligarchs and local authorities of Donbass and Crimea regions in Ukraine.

Russia to Respond

Moscow has already promised it will respond to the new round of sanctions if they are approved and imposed, according to a press release issued by the Russian Foreign Ministry.

“Instead of feverishly looking for ways of hitting harder the economies of its member-states and Russia, the EU would do better to start supporting the economic revival of the Donbass region and restoring normal life there,” the press release reads.

European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso confirmed that the new sanctions will be revealed on Monday.

US President Barack Obama said on Friday that Washington and the European Union were prepared to impose sanctions against Russia if the crisis in Ukraine continues to escalate following the signing of a ceasefire agreement.