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19 Jul, 2017 10:02

US oil sector warns Washington over 'unintended consequences' of new anti-Russian penalties

US oil sector warns Washington over 'unintended consequences' of new anti-Russian penalties

A new round of sanctions against Russia approved by the Senate could massively hit the US labor market and oil and gas projects around the world, having “unintended consequences,” according to the industry officials, as quoted by the Financial Times.

Last week, the Senate approved legislation banning US individuals and companies from providing goods, services or technology for Arctic offshore or shale projects where Russian companies are “involved.”

The step comes as an extension to the penalties introduced against Russia in 2014 over its alleged role in the conflict in eastern Ukraine. The new measures are reportedly to punish the Kremlin for its alleged interference in the US presidential election.

The new penalties might damage the competitiveness of American companies and potentially inhibit energy production not only for Russia but other global producers.

The proposed “dramatic escalation” of sanctions could hamper US businesses in world markets, causing “job losses and economic contraction in . . . American communities,” the daily cites the president of the US Petroleum Equipment & Services Association Leslie Beyer.

At the same time, some industry officials supported the step. Jack Gerard, president of the industry group the American Petroleum Institute, told the FT he backed extending the sanctions but urged the House of Representatives to “make critical modifications to avoid these unintended consequences.”

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Some Republican members of Congress are in favor of alterations aiming not to hurt US oil companies, but leading Democrats have backed the bill as passed by the Senate.