Exxon’s bank in Russia among those hit by sanctions over Ukraine

A bank used by Exxon Mobil Corp. to pay the salaries and pensions of its workforce in Russia was among those sanctioned by the White House, according to two people familiar with the matter.

The move sent the oil giant rushing to line up a new financial institution to keep its Russian operations going, one of the people said. Both were granted anonymity to discuss non-public information.

The situation illustrates the effect the U.S. measures are having on the energy industry even as President Joe Biden seeks to avoid penalties that could further increase oil and gasoline prices for U.S. consumers in response to President Vladimir Putin’s invasion of Ukraine.

Exxon, which has hundreds of workers in Russia, didn’t respond to requests for comment. 

The White House declined to comment on Exxon’s situation, citing comments by Press Secretary Jen Psaki on Sunday.

“We want to take every step to maximize the impact and the consequences on President Putin while minimizing the impact on the American people and the global community,” Psaki said on ABC’s “This Week.”

The Biden administration said last week it was sanctioning five of Russia’s largest banks, including Sberbank of Russia PJSC and VTB Bank PJSC, hampering their ability to operate. The bank used by Exxon couldn’t be learned. 

Exxon and others in the energy industry lobbied the Biden administration in the buildup to the Russian invasion to exercise caution on directly sanctioning Russia’s energy industry, according to one of the people, who was granted anonymity to discuss private deliberations. 

The Biden administration won’t sanction Russian crude oil or the state’s oil and gas sector, Amos Hochstein, the State Department’s senior energy security adviser, said on Bloomberg Television on Friday. 

“Our sanctions are not designed to cause any disruption to the current flow of energy from Russia to the world,” Daleep Singh, Biden’s deputy national security adviser for international economics, told reporters Thursday. Energy is “the one area where Russia has systemic importance in the global economy,” he said.

Exxon’s main remaining asset in Russia is a long-standing joint venture with Rosneft PJSC on Sakhalin Island in Russia’s Far East. Exxon abandoned other joint ventures with Rosneft in 2018 in the face of international sanctions against Russia’s energy sector.