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Gazprom warns sanctions could bite back

Tuesday, April 29, 2014 - 02:02

Apr 29 - The EU has named 15 politicians and military leaders that will be subject to asset freezes and travel bans. But as Ivor Bennett reports few expect it to have a significant impact in Russia and Gazprom has warned it could be Europe that ends up suffering.

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Vladimir Putin's inner circle is an exclusive club. One of those with access is Igor Sechin. He's the CEO of Rosneft, the largest publicly listed oil producer in the world. Sechin's proximity to Putin has made him a target of the latest US sanctions. Interestingly though says CMC's Michael Hewson, not the EU's. SOUNDBITE (English) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "The fact the Rosneft CEO is not on the list is very telling. And I think if the G7 really wants to be taken seriously on this ,they need to be singing from the same hymn sheet. And I think this is really where the power lies, it really lies with the US. And I think if the US want to bring Mr Putin to the table, they need to be a lot more aggressive I think." Russia's other energy giant is Gazprom. The source of 30 percent of Europe's gas, it is one of Moscow's prized assets. So far it's been left untouched - the EU and US mindful of the ramifications. But even without stricter measures, trouble is brewing. Gazprom has warned a price row with Kiev could disrupt Europe's supplies, 40 percent of which flows through Ukraine. Citi's Tina Fordham says it's a problem that could focus minds on energy diversification. SOUNDBITE (English) TINA FORDHAM, POLITICAL RISK ANALYST, CITI, SAYING: "Now that isn't something that can change overnight. And certainly our energy analyst cautioned there's no substitute for Russian gas. But you certainly hear at the political level a lot more focus on reducing that dependence." Despite the political manoeuvres, there's been no let up on the ground. Videos posted on social media showing a large pro-Russian crowd storming the regional government headquarters in the eastern city of Luhansk. Separatists raised a Russian flag above the building as police stood and watched. Underlining the lack of control the government has in this part of the country.

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Gazprom warns sanctions could bite back

Tuesday, April 29, 2014 - 02:02