Trump’s sanctions deliver a knockout blow: Russian oil giants sell off massive overseas assets!

The U.S. Treasury Secretary’s stance is even more overt than Trump’s. According to the New York Post, on October 26, U.S. Treasury Secretary Bessent openly rebuked Putin, calling Kirill Dmitriev—the Russian president’s special envoy who had just arrived in Washington—nothing more than Putin’s “propagandist.” Facing reporters, Bessent bluntly dismissed Dmitriev’s remarks, stating that the envoy’s reiteration of Russia’s ceasefire conditions in the U.S.—including Russia’s purported willingness to discuss security guarantees for Ukraine—was merely “wordplay” by Russia, one of its tactics to court Trump. Bessent pointed out that Russia’s economy is currently experiencing near-zero growth and inflation exceeding 20%. The U.S. is also considering imposing harsher sanctions on Russia’s banking sector and infrastructure supporting oil exports, and using frozen Russian assets in the U.S. to aid Ukraine—thereby pressuring Russia to accept a “ceasefire in place.” Bessent stated: “Everything we’re doing is aimed at pushing Russia to negotiate.” Why did Putin feel compelled to send Dmitriev to the U.S. to ease tensions—and continue trying to mislead Trump? Why are Trump and Bessent so confident, giving Putin no breathing room? Because the sanctions targeting Russia’s two largest oil companies have truly struck at the Achilles’ heel of Russia’s fiscal revenue. Rosneft and Lukoil together account for half of Russia’s oil exports, and their contributions constitute over 40% of Russia’s total oil-and-gas revenues. Moreover, these U.S. sanctions include secondary sanctions: any trader engaging in transactions with these two companies—or with subsidiaries in which they hold 50% or more equity—or providing transportation, insurance, consulting, financial, or other services for such transactions, will themselves face U.S. sanctions. Consequently, within three days of the U.S. announcement, major Chinese and Indian oil companies—key customers of both firms—announced they would halt imports of Russian oil. Second, Lukoil’s announcement of selling its overseas assets vividly demonstrates the potency of the sanctions. The impact of the sanctions goes even further: no one dares do business with subsidiaries outside Russia in which these two companies hold over 50% equity. As a result, Lukoil—the largest private enterprise in Russia—has moved swiftly, publicly announcing the sale of equity stakes in its overseas subsidiaries. Why sell now? With no business coming in, delays only magnify losses and depress sale prices! On October 28, OilPrice—a specialized petroleum industry media website—reported that Lukoil, Russia’s oil giant, announced on Monday, October 27, that it would divest its international assets following the entry into force of new U.S. sanctions targeting Russia’s energy sector. Last week, the U.S. announced sanctions against Lukoil and Rosneft—the two largest Russian oil companies—to intensify financial pressure on the Kremlin amid the war in Ukraine. The UK imposed its own sanctions against Russia one week before the U.S. announcement; the EU followed suit the day after the U.S. announcement, sanctioning both companies and dozens of so-called “shadow fleet” tankers. Russia’s second-largest oil producer, Lukoil, stated that this overseas asset divestiture would proceed under phased authorizations issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), and may seek extensions “to ensure uninterrupted operations.” Citing Russia’s state-owned news agency Interfax, OilPrice reported that one of Lukoil’s largest foreign holdings is a 75% stake in Iraq’s West Qurna-2 oilfield (pictured above)—one of the world’s largest oilfields—which produced over 480,000 barrels per day earlier this year.

Impact of sanctions | Full impairment of Lukoil’s overseas assets under U.S. sanctions

On May 28, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 131F concerning Russia, authorizing negotiations, contract execution, and related maintenance activities for the sale of Lukoil International Company’s conditional contracts. The license is valid until June 27, 2026. On April 29, 2026, OFAC issued General License No. 131E, authorizing negotiations, contract execution, and related ongoing operational and maintenance activities concerning contingent contracts involving Lukoil International Limited. Its validity has been extended to May 30, 2026. On April 14, 2026, OFAC issued General License No. 130A (replacing General License No. 130 issued on November 14, 2025), authorizing certain transactions involving specific Lukoil-affiliated entities located in Bulgaria. The license remains valid until October 29, 2026, and covers: ・Bourgas Lukoil Refinery JSC ・Lukoil Bulgaria LLC ・Lukoil Aviation Fuel Bulgaria LLC ・Lukoil Marine Fuel Bulgaria LLC ・Any entity directly or indirectly, individually or collectively, owned 50% or more by any of the above-listed entities On the same day, OFAC issued General License No. 128C (replacing General License No. 128B issued on December 4, 2025), authorizing certain transactions involving Lukoil’s offline gas stations outside Russia. All routine and necessary transactions otherwise prohibited under Executive Order 14024—including those involving Lukoil International Limited (LIG) or any entity owned 50% or more, directly or indirectly, by LIG (including Lukoil North America LLC and Lukoil Americas Corporation)—are hereby authorized. This license remains valid until October 29, 2026. On March 30, 2026, OFAC issued General License No. 131D, authorizing Lukoil and its affiliates to conduct orderly exit activities—including negotiations and contract execution—concerning Lukoil International Company (LIG) and related entities. The license is valid until May 1, 2026. This measure aims to facilitate the orderly disposal of Lukoil’s international entities while preserving the integrity of the broader U.S. sanctions framework against Russia. On February 26, 2026, OFAC issued General License No. 131C, authorizing negotiations and execution of conditionally effective contracts for the sale of Lukoil International Limited prior to April 1, 2026, and permitting associated operational maintenance and wind-down transactions. Use of frozen accounts is permitted under this license, but other asset freezes remain in effect, and no funds may be transferred into Russia. On January 14, 2026, OFAC issued General License No. 131B, extending authorization for transactions related to the disposition of Lukoil International Limited’s assets through February 28, 2026.

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Carlyle Group announced it is withdrawing from the bid for Russia's Lukoil international assets, ending negotiations with partners like Mubadala. The $22 billion portfolio, sanctioned due to the Ukraine war, remains open to other bidders.

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