U.S. sanctions on Alexey Mordashov have put the steel magnate’s empire in peril, underlining how the war in Ukraine is upending the businesses of some of Russia’s wealthiest billionaires.

The move against 56-year-old Mordashov and his family on Thursday comes after the European Union imposed sanctions against the tycoon and his steelmaker Severstal in early March. By threatening to choke off remaining export routes, the U.S. sanctions deal another blow to the fourth-richest Russian, who 16 years ago was close to becoming Arcelor’s biggest shareholder before being outbid by Lakshmi Mittal.

Mordashov later turned Severstal into one of the four biggest steelmakers in the U.S., before selling his American plants for $2.33 billion in 2014. Now the Office of Foreign Assets Control has given the billionaire’s business partners until the end of August to curtail their operations with Mordashov, formerly a regular attendee at the World Economic Forum in Davos. The cross-sanctions risks that come with the U.S. move threaten to unravel decades-long efforts to establish Severstal in overseas markets.

The former chairman of the World Steel Association also expanded his international presence by acquiring a stake in travel company TUI, which he helped support through Covid-19 crisis. Under Mordashov, Severstal became one of the world’s most profitable steelmakers, with its Ebitda margin reaching an eyecatching 50% last year.

Mordashov hasn’t commented on the U.S. penalties, though after being sanctioned by the EU in March he expressed hope that the war in Ukraine could soon be resolved.

“What is happening in Ukraine is a tragedy for two fraternal nations,” the billionaire said at the time. “It is terrible that Ukrainians and Russians are dying, people are suffering hardships and the economy is collapsing.”

After Mordashov was sanctioned by the EU, Severstal lost its main European export market. It re-directed sales to Asia and Turkey, but some of that business was unprofitable as clients demanded huge price discounts.

Severstal fell 11% in Moscow trading, following a 15% slump in the shares on Thursday. The stock is down 55% this year.

The company is cutting output and currently has orders to work at about 70% of capacity, a spokeswoman said. Severstal also became the first Russian company to default on corporate bond in March as Citigroup Inc. declined to process an interest payment.