Lloyds Bank has withdrawn from a deal with BP to purchase crude oil from Rosneft, sources close to the deal said.
Under the terms of the deal, Lloyds would loan BP up to $2 billion for the purchase.
Recently imposed U.S. and EU sanctions have further complicated the West’s economic relationship with Russia.
A Lloyds banker said, “Lloyds’ decision to leave the deal is because it does not want to embarrass the government, considering the current political situation with Russia. I think it was scared of going upstairs to ask permission.”
The British government is a partial owner in Lloyds.
Three other banks involved in the deal, Deutsche Bank, HSBC, and the Bank of China, will proceed with the planned financing.
A senior banker at HSBC told IBTimes UK that the bank is “not looking to open new business in Russia, due to the lack of clarity over future sanctions.”