Russia might have to open its treasure chest because of the new sanctions from the Europeans and Americans against the Putin regime. Russian finance minister Anton Siluanov has announced that the giant empire may be ready to use its whole fund for national prosperity to finance the projects of oil company Rosneft and gas company Novatek.
The West has put Russian companies and large banks on a penalty list, with the aim of forcing Russia to relent in the Ukraine crisis. On Friday, the European Union cut off important Russian weapons and energy companies from obtaining money in the E.U. financial markets. Three companies that manufacture airplanes, helicopters and tanks are also affected.
With the tapping of its own foreign exchange reserves, Russia was indirectly admitting for the first time that the sanctions are having an effect. In particular, the Kremlin wants to distribute its bunkered foreign currencies – $85.3 billion, amassed from oil and gas income surplus and meant for future generations – to Russian President Vladimir Putin’s closest advisors, including Rosneft boss Igor Sechin, a longtime friend of Putin, and Gennady Timchenko at Novatek.
The United States is especially harsh to almost all large Russian energy companies: Washington has barred Rosneft and Novatek not only from financing through Western banks but also the delivery of equipment for the support and exploration of oil and natural gas in the deep sea, the Arctic and for shale.
America also put the largest private Russian oil company, Lukoil, the world’s biggest gas company, Gazprom, as well as Surgutneftgas, Transneft and Gazprom Neft on the blacklist. Gazprom, which supplies much of the gas used in Europe, has been spared by Brussels up until now. However, the company controlled by the Kremlin is going on the offensive: Gazprom might supply Poland with only the contractually agreed minimum of gas. Larger orders, which the contract also allows for, would not be fulfilled. Alexey Miller, Gazprom’s chairman, announced in June that countries delivering natural gas to Ukraine would be considered for cutbacks. That could soon threaten Germany and Slovakia, as well as Austria.