U.S. Readies New Energy Sanctions on Russia

WASHINGTON—The U.S. is close to imposing the toughest round of energy sanctions so far on Russia, measures that would also hit Western companies like Exxon Mobil (XOM +0.22%) that are working with Russian state-controlled oil companies.

The sanctions, which the European Union is expected to match, would ban energy companies from working with Russia on future oil exploration in the Russian Arctic, deep seas and shale rock formations, according to a U.S. official.

The sanctions wouldn't affect current oil production, but could imperil the future of existing partnerships, including a deal between Exxon Mobil Corp. and OAO Rosneft, (ROSN.MZ -2.08%) the Kremlin-controlled oil giant, to drill in the Arctic Ocean.

Previous sanctions banned only the export of technology that could be used in such projects. Other companies potentially affected include BP (BP -0.21%) PLC and Royal Dutch Shell (RDSA.LN -0.83%) PLC.

"It'll deny them some contracts for sure, but it hurts Russia a lot more," the U.S. official said, referring to Western energy companies. "This puts their future economic growth in danger." 

Read the full article at The Wall Street Journal.