US Sanctions Force Lukoil to Exit Foreign Assets in Multibillion-Dollar Deal

On January 29, Russian oil company Lukoil announced the completion of a deal with the American investment firm Carlyle Group. Under the agreement, Carlyle became the buyer of the foreign assets held by LUKOIL International GmbH, which includes oil refineries in Europe, a network of fuel stations, and several upstream assets.

Photo: commons.wikimedia.org by Ing. Mgr. Jozef Kotulič, https://creativecommons.org/licenses/by-sa/4.0/

Lukoil, Ľubotice 22 Slovakia 1

US Blocking Sanctions Forced the Sale

The decision to sell followed the introduction of new blocking sanctions by the US Treasury on October 23, 2025, targeting two major Russian oil companies, including Lukoil.

The restrictions applied to all entities under their control, as well as any companies directly or indirectly owned by Lukoil at a level of 50 percent or more. Blocking sanctions effectively paralyzed the company's ability to manage these assets and conduct transactions with them.

"The ultimate goal of the sanctions is not to punish, but to achieve positive changes in the behavior of the Russian side,” the document stated.

"In connection with the introduction of restrictive measures, the company announces its intention to sell its international assets. The review of applications from potential buyers has begun,” Lukoil said in an official statement.

Assets Valued in the Tens of Billions of Dollars

According to available information, the transaction may cover Lukoil's entire foreign asset portfolio. The company owns oil refineries in Europe, around two thousand fuel stations across Europe, Asia, and the Middle East, as well as several oil and gas fields.

Lukoil also participates in projects in Azerbaijan, Kazakhstan, Uzbekistan, Iraq, Egypt, Cameroon, Nigeria, Ghana, Mexico, the United Arab Emirates, and the Republic of the Congo. Various estimates place the total value of the portfolio between 14 and 22 billion US dollars.

As previously reported by Bloomberg, Lukoil sought a single buyer for all its foreign assets in order to complete the transaction in one step rather than sell the business in parts. Another key condition reportedly involved the US administration's preference for American companies among the buyers, significantly narrowing the pool of potential acquirers.

Fierce Competition for Lukoil's Assets

After Lukoil announced the sale, intense competition unfolded in Europe over the right to continue operating its assets. Several countries reportedly pressured Washington to issue licenses allowing the use of the company's refineries after the sanctions took effect.

"A real battle is underway over how to dispose of Lukoil's foreign assets, especially after the US Treasury rejected Gunvor's proposal to acquire them in full,” said Richard Bronze, head of geopolitics at consulting firm Energy Aspects Ltd.

The first bidder was international energy trader Gunvor Group, one of the world's largest importers of Russian raw materials. Market participants were surprised by the speed and scale of the bid, as Gunvor planned to acquire all assets despite lacking sufficient financial resources.

Washington responded by announcing a thorough review of Gunvor's history and any remaining ties to Russia. The US Treasury later described Gunvor as a Kremlin proxy and stated that the trader would "never receive a license to extract profit.”

Following Gunvor, other potential buyers emerged, including American investment bank Xtellus Partners and around a dozen additional investors. Among them were Exxon Mobil, Chevron, and private equity fund Carlyle Group.

The race also attracted Saudi energy company Midad Energy, led by Abdulelah Al-Ayban, the brother of Saudi national security adviser Musaid Al-Ayban, who had previously participated in US-Russia negotiations. Austrian businessman Bernd Bergmair, formerly active in the adult entertainment industry, also expressed interest.

Lukoil Shares Rise After Deal Announcement

News of the agreement with Carlyle boosted Lukoil shares. On Thursday, the company's stock rose by 3.2 percent on the Moscow Exchange, reaching 5,385 rubles per share.

Earlier, refusals by potential buyers had weighed on the stock. Gunvor's withdrawal from negotiations led to a decline of nearly four percent. Since Lukoil was placed on the US sanctions list, its market value had fallen by more than 15 percent.

Carlyle Secures the Deal

Carlyle Group is one of the world's largest investment firms, managing assets worth more than 147 billion US dollars. As of 2023, total assets under management reached 426 billion dollars.

Institutional investors control roughly 63 percent of Carlyle's shares. In early 2025, its ten largest shareholders included BlackRock with 8.10 percent and Morgan Stanley with 3.14 percent, alongside several major private investors.

Founded in Washington in 1987, Carlyle focuses on private equity, real assets, and private credit. According to the PEI 300 index, the firm ranked first globally by capital raised among private equity companies from 2010 to 2015.