President Barack Obama followed the European Union’s lead Tuesday in announcing a fresh set of economic sanctions against Russia over its involvement in the Ukrainian uprising, but some U.S. companies that do business in Russia could also see their businesses affected by the West’s latest punishment.
The most recent sanctions aim to put even broader pressure on the energy, finance and defense sectors of the Russian economy. The U.S. initiated specific sanctions on three financial institutions – VTB Bank, the Bank of Moscow and the Russian Agriculture Bank – as well as the United Shipbuilding Corporation, the U.S. Treasury Department said Tuesday.
One purpose of the sanctions put in place on Tuesday will be to cut Russia off from a supply of goods and technology that feeds the country’s energy sector. Bloomberg notes that multiple U.S. companies generate anywhere from 4% to 6% of their global sales by contributing to that supply chain – and are likely to take a hit after Tuesday’s announcement — including oilfield services companies such as Baker Hughes
BHI
, Halliburton
HAL
and Schlumberger
SLB
.
Also put in a precarious spot is Exxon Mobil
XOM
, which signed a huge deal with Moscow-backed oil company Rosneft three years ago to form a joint venture to extract oil and natural gas from the Arctic Ocean. Both companies have reportedly invested billions of dollars in the partnership, which now could be in jeopardy despite the fact that a drilling rig was already en route to the icy waters North of Russia from Norway last week.
The U.S. transportation industry could also be affected by escalating tensions between the West and Russia, as airplane manufacturer Boeing
BA
imports more than a third of its titanium from Russia to build its products and automakers such as Ford
F
and General Motors
GM
sell hundreds of thousands of cars in Russia every year.
Major food brands aren’t safe either, as fast-food companies McDonald’s
MCD
and Wendy’s
WEN
have recently come under fire from Russian officials. Meanwhile, PepsiCo and Coca Cola
KO
could both be worried about their own Russian operations, which have expanded rapidly in recent years. Coke has agreed to invest billions of dollars in the country in coming years, while Pepsi
PEP
paid $5.4 billion in 2010 to acquire Wimm-Bill-Dann, which one of Russia’s largest food-and-beverage companies and its biggest dairy producer.
