While Russia is boosting oil output following a decision by OPEC and non-OPEC producers to ease extraction cuts, US petroleum companies are reaping the bitter fruits of Washington's anti-Russian sanctions.
After the imposition of sanctions against Moscow over Crimea's reunification with Russia in 2014 and their subsequent extension under the pretext of Russia's alleged meddling in the US 2016 presidential election, major American oil companies were forced to withdraw from the country's energy projects.
Thus, in March 2018, Exxon Mobil signaled that it would quit some joint ventures with Russia's Rosneft, including exploration works in the Kara Sea, above the Arctic Circle.
On July 3, 2017, The Wall Street Journal noted that Exxon Mobil and "other energy companies" argued that the extension of sanctions "could shut down oil and gas projects around the world that involve Russian partners."
The same month, the US Treasury fined Exxon Mobil $2 million for the alleged violation of anti-Russia sanctions in May 2014. The move was dubbed "unfair" by the US oil corporation.
However, Exxon Mobil's troubles did not end there, as Rosneft has reportedly filed a 26.7 billion ruble ($425.3 million) suit against Exxon Neftegaz Ltd., the operator of the Sakhalin-1 oil and gas project — the American company's only Russia-based venture not affected by the US sanctions. Rosneft is accusing the participants of the endeavor of "unjust enrichment and interest gained by using other people's money" between July 10, 2015, and May 31, 2018.
DETER Act and US Energy Giants
Meanwhile, American lawmakers are seemingly not going to make it easier for US energy giants: Senator Marco Rubio (R-FL) is pushing ahead with his bipartisan Defending Elections from Threats by Establishing Redlines (DETER) Act.
Under the bill, the Director of National Intelligence (DNI) would inform Congress on whether any foreign government has meddled in a vote within one month after every federal election. In case Russia "interferes" in the election process, "the bill mandates a set of severe sanctions that must be implemented within ten days of the DNI's determination."
Citing two Senate aides, Reuters reported that lobbyists representing oil and gas corporations with interests in Russia are opposing the legislation. Similarly, the US-Russia Chamber of Commerce, which includes Shell, Exxon Mobil and Chevron, is signaling its growing concerns about the potential anti-Russian measures.
US Sanctions Failed to Hit Russian Energy Sector
Thus, Italy's ENI is continuing to drill wells in the Black Sea together with Rosneft, while the French Total is working on Russia's Yamal liquefied natural gas project. Total holds a 20 percent direct interest in the endeavor. In January 2018, the shareholder purchased the first batch of liquefied hydrocarbons from Yamal LNG.
After the protracted period of slump between 2014 and 2016, oil prices have largely recovered, prompting Russia to step up its crude output. In the first week of June, Russia's oil production reached 11.1 million barrels per day (bpd), while in early July, the country's oil output amounted to 11.193 bpd.
According to Russian Energy Minister Alexander Novak, Russia is going bolster its crude production by around 200,000 bpd in the second half of 2018. The decision to increase crude production was taken by a consortium of OPEC and non-OPEC countries after their previous attempts to balance the global energy market through oil-supply cuts had proven effective.
