Despite the U.S. government’s newly imposed sanctions on Russian oil company Rosneft, Morgan Stanley CFO Ruth Porat does not believe the restrictions will affect a pending deal between the two firms, Reuters reports.
Last December, the Wall Street bank agreed to sell the majority of its oil trading assets to Rosneft, with the transaction expected to close later this year. However, that was before Russia invaded the Ukraine’s Crimea peninsula. Since then, tensions have escalated between the U.S. and Russia in a manner that’s highly reminiscent of the Cold War.
The latest round of U.S. sanctions is a response to “Moscow’s reluctance to curb violence in Ukraine,” says the news wire.
Porat remains confident that the deal will go through.
“Recognizing the guidance was just released last night, we don’t believe it applies to our transaction,” she was quoted as saying in an interview. “We continue to do all the work necessary for closing by the end of the year, obviously subject to regulatory approval.”
Porat’s comments come in the wake of the U.S. imposing “its toughest sanctions yet on some of the key players in the Russian economy,” says Reuters. The measures include shutting off long-term funding to Rosneft from U.S. financial institutions.
Although the sanctions do not completely freeze Rosneft’s assets, they do “restrict the short-term funding” it needs for its daily operations. They also hamper U.S. companies from doing business with Rosneft.
It remains to be seen if today’s news regarding the Malaysian passenger jet that was shot down by Russian militants over eastern Ukraine will lead to tighter U.S. sanctions on Russian businesses.