US sanctions force Lukoil to abandon global operations in dramatic retreat
Russia’s second-largest oil company Lukoil has announced plans to sell its international assets following the imposition of US sanctions on the company and its subsidiaries, as Washington’s latest action forces a dramatic retreat from global markets and threatens to starve the Kremlin of crucial foreign revenue.
‘PJSC “LUKOI” informs that owing to introduction of restrictive measures against the Company and its subsidiaries by some states the Company announces its intention to sell its international assets,’ the company said. ‘The consideration of bids from potential purchasers has been started.’
The sale of the assets is being conducted under a US Treasury Department wind down licence, the company said, explaining that it plans to apply for an extension of the licence if necessary to ensure uninterrupted operations of its international assets.
President Donald Trump announced sweeping new sanctions on Russia’s two largest oil companies, Lukoil and Rosneft, and nearly three dozen of their subsidiaries last week, as frustration in Washington grows over stalled negotiations to end the Russia-Ukraine war, following in the footsteps of the European Union and United Kingdom.
The sanctions mark the first direct US measures on Russia during the second Trump administration and target one of Russia’s largest sources of revenue. They aim to bar foreign countries or companies from conducting business with the oil companies and cut them off from much of the international financial system.
‘I just felt it was time. We waited a long time,’ Trump said at the White House, posting the sanctions list on social media and calling on Moscow to agree to an ‘immediate cease-fire’, the Wall Street Journal reported.
The Treasury Department warned that ‘foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base’ also ‘run the risk of being sanctioned’, adding that transactions with the newly designated entities ‘may risk the imposition of secondary sanctions on participating foreign financial institutions’.
The decision by Lukoil to sell its international assets marks the most concrete demonstration of the US sanctions’ impact on Moscow’s economy, signalling an unprecedented forced retreat from the global stage.
The action has sent shockwaves through key international markets, primarily due to the threat of secondary sanctions aimed at non-US entities.
In India, a major buyer of Russian oil, Rosneft’s partners including Nayara Energy and other refiners are scrambling to abandon Russian crude contracts and secure alternative supplies from the Middle East and the West, driven by fear of losing access to the US dollar-based banking system.
In Europe, countries hosting significant Russian energy infrastructure face forced restructuring.
Bulgarian Prime Minister Rosen Zhelyazkov confirmed the government has until 21 November to wind down operations, with options including sale or potential state management under consideration. Serbia also faces intense pressure over NIS, the country’s sole oil refiner which is majority owned by a Russian state energy company. Rosneft’s subsidiaries in Germany, which control key refining capacity, had already been put under the temporary control of the German government to secure energy supply, demonstrating a coordinated effort to sever Russian operational control across the continent.
The sanctions come as negotiations over ending the war in Ukraine have stalled, with Trump putting off a planned second summit with Russian President Vladimir Putin in Budapest.
