Russian company Lukoil to sell international assets in response to new sanctions

Russian oil company Lukoil says it is selling its international assets in response to sanctions imposed by the United States that aim to push Russia to agree to a ceasefire in its war against Ukraine.

The company said in a statement that it was already talking with potential purchasers. The transactions would be carried out under a sanctions grace period that allows transactions with Lukoil until November 21, and the company said it would seek an extension, if necessary, to complete the transactions.

Lukoil has stakes in oil and gas projects in 11 countries. It has refineries in Bulgaria and Romania and a 45 per cent stake in a refinery in the Netherlands, as well as gas stations in a number of countries.

US President Donald Trump on October 22 announced new sanctions against Lukoil and Rosneft, Russia’s two biggest oil companies accounting for roughly half of the country’s oil exports. Oil and gas revenues are a major source of government revenues in Russia. US Treasury Secretary Scott Bessent called on Russia to immediately agree to a ceasefire in Ukraine.

The sanctions make it difficult for Lukoil and Rosneft to do business outside of Russia. In addition to barring US businesses from dealing with the two companies, the sanctions carry the threat of secondary sanctions on foreign banks that handle their transactions. That means any bank that wants to maintain contact with the dominant US financial system will think twice about doing business with them.

Rosneft has a stake in a refinery in Schwedt, Germany, but the German government has taken custody of the stake and the facility no longer sends revenue to the parent company.

The sanctions take aim at Lukoil and Rosneft’s sales to India and China. Russia shifted oil flows to Asia after the European Union barred most Russian seaborne oil imports.

The sanctions have raised questions about whether refineries in India would halt purchases to avoid entanglement with sanctions. The two companies account for some 60 per cent of India’s imports of Russian crude, according to Shumita Deveshwar, chief India economist at GlobalData TS Lombard. Trump has put a 25 per cent import tariff on India goods above a 25 per cent tariff on most Indian goods imports to the US.

Asked about Trump pressuring India and China to stop buying Russian energy, Kremlin spokesman Dmitry Peskov on Tuesday told a conference call of reporters: “We are offering our product. This product is of strategic importance to many countries. It is competitive, it is attractive. And then it’s up to the countries themselves to decide how attractive it is and how much other alternatives offered can compete with our products.”

AP