Russia’s oil company, Lukoil, is “facing one of its worst crises” after US sanctions hit the Kremlin, the former chief of the National Bank of Ukraine has claimed. Writing on X on Thursday (November 3), Kyrylo Shevchenko, who held the post from 2020 to 2022, said that the oil company has been plagued by several incidents in recent days, which have severely affected its operations.
In Switzerland, according to Mr Shevchenko, Washington blocked Lukoil’s €14 billion (£12.5 billion) asset sale to Gunvor – a multinational energy commodities trading company registered in Cyprus – over its ties to the Kremlin. He claimed “the company must offload or write off its holdings by November 21, or risk total freeze under US sanctions”. Meanwhile, in Bulgaria, the Government plans to seize and resell Lukoil’s $1.5 billion (£1.1 billion) Burgas refinery, ensuring compliance with the new sanctions and “cutting Moscow’s control over local fuel markets”.
Finally, in Iraq, operations at the giant West Qurna-2 oil field are facing shutdowns after Lukoil declared force majeure amid global restrictions. Iraq has halted all cash and crude payments to Lukoil, three sources with knowledge of the matter told Reuters on Monday (November 10).
This X post comes as the US Treasury Department delayed the implementation of sanctions against Lukoil on Saturday (November 14), allowing the company time to sell its international assets, according to Bloomberg. Lukoil entered negotiations to sell its foreign assets shortly before requesting that US officials postpone the imposition of sanctions.
The Trump administration has granted limited exemptions to sanctions for certain transactions involving Lukoil in order to facilitate cooperation with foreign governments and potential buyers regarding the company’s international asset sales, the Treasury Department said. It also issued a license allowing specific transactions related to Lukoil’s retail gas stations and contracts for selling its international assets through December 13, Bloomberg reported.
An additional exemption was granted for deals involving Lukoil’s Bulgarian subsidiaries, with sanctions on those entities postponed until April 29.
The US announced sanctions on Russia’s two largest oil companies – Rosneft and Lukoil – last month in an effort to pressure Russian President Vladimir Putin into negotiations with Ukraine. The measures targeted not only the two firms but also 36 of their subsidiaries.
Following the announcement, several European countries that host Lukoil refineries began seeking ways to keep the facilities operational and avoid shutdowns. For example, Romania reportedly requested that Washington postpone the sanctions and has taken control of Petrotel Lukoil, the company’s Romanian subsidiary.
