Lukoil Under Tight U.S. Oversight: Sanctioned Assets Can No Longer Be “Washed Clean”
The U.S. sanctions machine now controls every transaction involving Lukoil’s overseas assets — from Iraq’s oil fields to EU fuel networks — leaving the company with almost no room to maneuver.
The latest package of US sanctions against the Russian oil sector includes Lukoil. A Key Element — the US Treasury (through the OFAC department or equivalent) has established that any redemption of Lukoil's foreign assets must be accompanied by strict conditions: the seller must definitively sever ties with the target company, the assets may be sold only under the appropriate license, and the seller's funds — must remain frozen until checks are completed.
The US has allowed temporary (until December 13) negotiations on the sale of Lukoil assets under the condition of rigid control. At the same time, the deal proposed by the trader Gunvor for an amount of about $22 billion was withdrawn after clear signals from Washington that such a deal would not be sanctioned-approved.
In addition, Lukoil was forced to declare force majeure at the key field in Iraq (West Qurna-2) because state payments from Iraq were suspended due to US sanction pressure.
This means that the "American" line — is not just sanctions, but control to ensure that foreign assets of a Russian company cannot be transferred "cleanly" without a final break in ties with the parent structure. In this sense, Lukoil is not just facing restrictions — it finds itself under rigid external control, which complicates classic "sale-redemption" schemes.
Lukoil Asset Redemption Under Threat: What Examples Show
As sources report in detail, several potential buyers of Lukoil assets are already under control: the American private fund Carlyle Group is studying the possibility of procurement, but only of assets outside Russia — taking into account sanction risks. In Kazakhstan, where Lukoil has stakes in the Karachaganak and Tengiz projects, the official authorities have stated that there are no negotiations on redemption at the moment.
In Finland, the Lukoil-controlled company — Teboil — is already expecting a change of owner: Finnish regulators are warning of caution in conducting operations due to sanctions.
Iraq, for its part, is discussing a six-month deferral of sanction action to give time to sell 75% of Lukoil's stake in West Qurna-2. However, Iraqi officials indicate that the state is not ready to take the asset for itself — it is "too big."
In total, this means: the market does not see a clean, easy path for Lukoil to evade the sanction regime. The sale of assets — is not so much a question of price, as a question of compliance with US norms and Western law, as well as the actual independence of the acquired assets from the parent company.
Why the US Position Is So Principled and What This Means for Lukoil
The key message here lies in the following: the United States did not just see Lukoil as a source of revenue for the Russian budget — they decided that the redemption of foreign assets must be either under their clear control, or not at all. This simultaneously signals two things. First — the energy carriers and petroleum products market for the Russian Federation must be complicated to reduce the money flow that goes to the war in Ukraine. Second — by allowing negotiations regarding assets, the US demands that the redemption process not turn into a "re-registration" scheme of assets without real restructuring or ties to the parent structure.
For Lukoil, this means: any buyer, or any redemption mechanism must meet the standard: "the matter must look approximately as if it is no longer Lukoil." If close operational, financial, managerial ties remain — the American sanction system has the right to block them or freeze payments.
From the point of view of the political signal — the US position is clear: sanctions against Russian energy — are not a temporary operation, but part of broader pressure on the Russian Federation through the war in Ukraine. And at the moment, it is hard to imagine that Lukoil will be able to simply "survive" at the expense of selling assets without cardinal changes in structure and behavior.
How This Looks in Practice and Why Lukoil Is Unlikely to Bypass Sanctions
Lukoil has already lost control over a number of assets or faced the fact that real estate must be sold under pressure. For example, foreign gas stations, networks, or sites of Lukoil are forced to transform — Teboil in Finland is clearly in a state of expectation. The redemption of assets in Kazakhstan is not happening yet. The amount of potential deals is estimated in tens of billions of dollars, but what is decisive is not the amount, but compliance with sanction requirements.
The American license allows only negotiations until December 13. After that, Lukoil and its buyers will fall under the full force of prohibitions. If the asset is not sold or restructured — there is a risk that it will be nationalized or simply stopped. A telling example with the asset in Iraq: if West Qurna-2 continues not to pay funds, Lukoil may leave the project altogether.
Thus, to "bypass" sanctions does not mean "sell the asset and forget." To bypass — means to conduct the sale according to the requirements that the USA has set, with agreement on severing ties, under a license, with verification of the future owner. In this sense, Lukoil is in the position of a player who has a choice: either submit to the new rules of the game — or risk losses and blockages.
the situation around Lukoil demonstrates that the US sanction machine — is not just a set of accusations, but a comprehensive tool of control over transactions. The purchase of assets abroad — is not just a commercial deal, it is an element of geopolitics. In this game, Lukoil has very little room. If it wants to preserve its foreign assets — it must either conduct their sale on terms acceptable to the USA, or face significant risks.
Volodymyr Kuznetsov, communications specialist, expert at the United Ukraine Think Tank