The fresh round of US sanctions against Russia has created problems for Italian bank Intesa Sanpolo in its efforts to put together a syndicated loan for oil trader Glencore and Qatar’s sovereign wealth fund, Reuters reported on August 25, citing unnamed banking sources.

Intesa was a key participant in the murky privatisation of a 19.5% stake of Kremlin-controlled oil major Rosneft, financing the massive €5.2bn loan for the purchase by a consortium of Glencore and the Qatar Investment Authority (QIA).

But Reuters reported that Western banks, including those from the US and France, have put their participation in the loan on hold, after Intesa invited about 15 lenders to join the loan syndication in May.

“The syndication is stuck because of new US sanctions on Russia,” a London-based source told the news agency, adding that “the new sanctions are so wide-reaching that they will surely impact all similar deals involving Russian state firms”.

At the neginning of August, US President Donald Trump grudgingly approved a package of new sanctions on Russia that limits his own authority to reverse or relax them.

The compliance departments of the banks are taking their time to “understand the new sanctions”, sources told Reuters, while the political stand-off between Qatar and Saudi Arabia is also complicating the situation.

According to Reuters, Chinese lenders ICBC and Bank of China were willing to participate in the deal, but grew more wary given the political sensitivities surrounding Qatar. 

On top of the sanctions and political turmoil in the Middle East, the extremely low transparency of the Rosneft privatisaion deal is not helping either, as bankers are said to question “whether they could go ahead with the syndication without knowing all beneficiaries of the transaction”, according to Reuters.

In the latest attempt to shed light on the deal, the Wall Street Journal reported on June 7 that the sale of 19.5% of Rosneft to QIA and Glencore could have been a facade for fixing a severe budget squeeze, with Moscow and Doha agreeing that Russia can buy the stake back.

At least part of the shares under the $11.5bn privatisation can reportedly be bought back by Russia within10 years under a direct agreement between Russian President Vladimir Putin and Qatar's emir Tamim bin Hamad Al Thani.

“The implication is that the deal was essentially a loan to the Russian government that was struggling to finance its 2016 fiscal budget, and that Russia is obliged to repay the loan,” Aton Capital commented on June 8.

The Qatari authorities would likely want to resell the stake at a higher price, while the eventual buyback was supported by Rosneft head Igor Sechin. He had initially opposed the privatisation that was paraded by the Kremlin as an indicator of renewed investor confidence in the Russian economy, the WSJ claimed.

Sechin is said to have reached out to Glencore with the Rosneft deal on behalf of Putin to address the unprecedented budget squeeze that hit Russia in 2016. Many of the details of the financing of the privatisation still remain murky.

“We don't find such hypothetic allegations possible and correct,” Kremlin press secretary Dimitri Peskov told journalists on June 7, commenting on the reports.