LONDON/MILAN (Reuters) - Italian bank Intesa Sanpaolo has encountered problems syndicating a loan to Glencore and Qatar’s wealth fund to finance their purchase of a stake in the Kremlin-controlled oil major Rosneft because of new U.S. sanctions against Russia.

The Intesa Sanpaolo logo is seen in Milan, Italy, in this January 18, 2016 file photo. To match Insight ITALY-BANKS/FUND REUTERS/Stefano Rellandini - RTX2A32V

Four banking sources told Reuters that Western banks including from the United States and France have so far put on hold their participation in the syndication of the 5.2 billion euro ($6.13 billion) loan that Intesa provided last year.

Intesa ISP.MI invited about 15 banks to join the loan when it opened the syndication in May. A loan of this size would normally take between four and six weeks to syndicate, though deals involving emerging markets can sometimes take a few weeks longer.

The banking sources said their compliance departments needed to understand the new sanctions.

They also said the syndication was complicated by a political stand-off between Qatar and Saudi Arabia. Banks are taking a more cautious approach to deals involving Qatar as they are wary of damaging their relations with Saudi Arabia and the other three Gulf nations embroiled in the dispute.

“The syndication is stuck because of new U.S. sanctions on Russia. The new sanctions are so wide-reaching that they will surely impact all similar deals involving Russian state firms,” said a London-based source with a large Western bank invited by Intesa to participate in the syndication.

Intesa, Italy’s largest retail bank, declined to comment. The banking sources did not want themselves or their banks to be named because they were not cleared to speak about the deal and because talks between Intesa and the banks about the syndication are confidential.

Last month, Washington imposed new sanctions on Russia in the strongest action against Moscow since 2014 following Russia’s annexation of Crimea and incursion in east Ukraine.

The new round of sanctions was in part a response to conclusions by U.S. intelligence agencies that Russia meddled in the 2016 U.S. presidential election. The sanctions dashed hopes of a rapprochement between Moscow and Washington.

The syndication was meant to spread the risk for Intesa which has so far lent all of the money. The loan helped commodities house Glencore GLEN.L and the Qatar Investment Authority buy 19.5 percent in Rosneft ROSN.MM to help the Russian government plug budget holes.

The Italian government says the loan is compliant with the new sanctions.

COMPLICATED

Intesa, which ranks as a fairly small investment banking player but has good connections in Russia, invited several French, Dutch and U.S. banks as well as China’s Bank of China and ICBC to participate in the deal.

A source said ICBC and Bank of China had indicated they would be willing to participate in the deal, though they are more wary now given the political problems hitting Qatar. An official at ICBC declined to comment and one at BOC did not immediately respond to a request for comment.

Bankers said the syndication was always expected to be complicated.

Rosneft, its boss Igor Sechin and Russia’s top state banks are all subject to sanctions imposed after Russia’s annexation of Crimea from Ukraine in 2014, and some banks had refused to consider the deal on these grounds from the start.

In addition to that, Glencore and QIA never disclosed full details of the deal, prompting the bankers to question whether they could go ahead with the syndication without knowing all beneficiaries of the transaction.

A spike in tensions between Qatar and its Gulf neighbors including Saudi Arabia also happened just as Intesa started syndicating the loan.

“The regional dispute has not helped – it is tough,” a London-based loan banker said.

“Political tensions around Qatar slowed the deal somewhat. But a real problem came when the U.S. imposed new sanctions (on Russia) in July,” another London-based banking source said.

Back in 2014, U.S. and European sanctions made it impossible for Russian state-owned companies and many private ones to raise new capital but left loopholes for raising money.

“With the new sanctions, I expect a lot of troubles with lending to projects led by Russian state firms... And possibly to many private ones,” said one of the banking sources.

($1 = 0.8477 euros)