A former Lukoil executive, granted anonymity to speak freely, said the move could see the company’s revenues and profits plummet by “about 30 percent,” as it is forced it to sell three refineries and around half of its roughly 5,000 petrol stations worldwide.
“Lukoil is finished,” they told POLITICO.
The move comes days after the U.S. blacklisted Lukoil, as well as oil and gas firm Rosneft, in a surprise sanctions package that it said was “a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine.”
“Given [Russian President Vladimir] Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” said Secretary of the Treasury Scott Bessent at the time. “We encourage our allies to join us and adhere to these sanctions.”
The U.S. Office of Foreign Assets Control has imposed a deadline of Nov. 21 for the company to wind down its businesses abroad or face hefty penalties. Lukoil said in its statement Monday it would comply with the demands and request an extension if needed to facilitate the sale.
Those restrictions mean the companies affected will have to sell off their European operations and stop pumping supplies of oil to their remaining buyers on the continent, opening up the prospect of legal penalties for any firm still dealing with them. Rosneft and Lukoil account for around two-thirds of the 4.4 million barrels of crude Russia exports each day.
While the measures have been broadly welcomed by European leaders, a handful of nations including Hungary are seeking exemptions or additional time to implement the sanctions.
Hungarian Prime Minister Viktor Orbán, who has sought to deepen his country’s reliance on Russian energy exports, will visit the U.S. next week to try to secure special treatment to continue paying Moscow for oil.