Lukoil under pressure—the new blow by the EU and the US is redefining energy in the region

Oil giant Lukoil, one of the most powerful private Russian energy companies, has come under increasing pressure from the West—new US and European Union sanctions are already beginning to undermine its global network, with the effects being seen in Iraq, the Balkans and beyond

 

Author: Ana Anastasovska

 

In October–November 2025, the US and the EU tightened the sanctions regime against Russian energy companies, including Rosneft and, significantly, parts of the Lukoil group. These measures restrict banking and insurance channels, freeze assets, and create practical obstacles to payments and trade, while also directly affecting the operations of the companies’ foreign assets (for example, in Iraq and the Balkans).

The following is an overview of the measures, their practical implications and specific examples by country.

The US Department of the Treasury (OFAC/Treasury) has published a list of subsidiaries of Rosneft and Lukoil that are subject to blocking sanctions, with a direct asset freeze and a ban on transactions with US persons. The sanctions are aimed at hindering the companies’ ability to use international payments, banking services, marine insurance for tankers, as well as preventing oil smuggling through so-called “shadow fleets”—which make oil transactions more expensive and logistically more difficult.

The EU has continued and expanded the sanctions framework (19th sanctions package), including new energy-related restrictions (e.g. targeting LNG), and additional measures that complicate the status of Russian energy players in Europe. In practice, national authorities may allow confiscation/temporary administration of critical facilities under certain conditions.

 

Iraq in an extremely worrying situation

Due to the sanctions, Lukoil said it had declared a state of “force majeure” at one of the world’s largest oil fields, West Qurna-2 in Iraq, as direct payments and logistics became legally and financially impossible. Iraq’s State Organization for Marketing of Oil (SOMO) has frozen deliveries and canceled orders until the legal and payment mechanisms are resolved. Lukoil warned that if the situation is not resolved, it may stop production and exit the project after a certain period. Iraq has been forced to look for ways to redistribute revenue/sales through state mechanisms to avoid paying directly to a sanctioned entity–an option that keeps oil flowing to the market but creates political and legal tensions. According to Bloomberg, oil continues to flow, but sales and payments have been reorganized.

What does this mean for the Balkans and for Lukoil locally?

Some Balkan countries with Lukoil subsidiaries are taking urgent measures to protect their national energy systems and comply with US sanctions. The Bulgarian authorities have taken steps to allow for temporary administration/sale access to the Burgas refinery (owned by Lukoil) to protect the plant from indirect effects of sanctions and ensure energy stability. The government has prepared legislative amendments that would allow the confiscation or sale of facilities at risk of sanctions. Lukoil has urged the authorities not to obstruct a private sale process, but the government appears to be moving towards a state-managed sale or temporary administration while the legal status is being resolved. Bulgaria’s refining and logistics capacities are subject to political and trade negotiations; much of the domestic distribution of petroleum products and strategic reserves depends on regulatory arrangements that are now being redefined.

Romania has also begun implementing measures to take control of the local subsidiary of Russia’s Lukoil in order to protect its national energy system and comply with US sanctions. Lukoil operates 320 gas stations in Romania, operates the Petrotel refinery (which supplies about a quarter of the country’s fuel market) and has exploration rights in part of the Black Sea.

Romanian Minister of Energy Bogdan Ivan said on November 11th that Romania would not seek an extension of the sanctions deadline, adding that Bucharest supports the implementation of recent US measures.

Serbia has extensive ties with Russian energy companies through the Oil Industry of Serbia (NIS), whic is controlled by Gazprom Neft. Disruptions and shortages of crude oil and refining inputs have been reported due to the effects of sanctions on the region. Serbian Parliament Speaker Ana Brnabić announced that an amendment to the 2026 Budget Proposal would be introduced, outlining the circumstances under which Serbia might need to take over NIS. Brnabić, however, added that she would not support the nationalization of NIS. Earlier, Serbian President Aleksandar Vučić stated that the Serbian government had given Russia 50 days to find a new owner for the Oil Industry of Serbia.

In Croatia, according to local media reports, the Slovenian Petrol is mentioned as one of the possible buyers of Lukoil’s assets, followed by retired General Ivan Cermak, who is an important player in that part of the business, and there is even mention of the possibility that Lukoil workers in Croatia could organize themselves and carry out a “management buyout”, i.e. try to buy out the company they work for themselves.

 

What is happening with Lukoil in North Macedonia?

Lukoil owns a network of gas stations and retail operations in North Macedonia with a significant local workforce. Following the announcement of the sanctions, local markets and regulators are assessing scenarios for ensuring stability, perhaps through a buyout/reorganization or state measures if international transactions are prohibited. If Lukoil leaves, there is a risk of disruption to the retail network (if payment/delivery channels are disrupted) and potential market reallocation if assets have to be sold or nationalized.

The President of the Energy Regulatory Commission (ERC), Marko Bislimoski, recently stated that Lukoil Macedonia should be given a chance and that it can supply refined products from other countries.

I had a meeting with the representative of “Lukoil” Macedonia and he will take all measures so that those people do not lose their jobs. So, “Lukoil” can continue to work and provide refined products. So far, it has been providing most of it from Bulgaria, but it can also provide it from other countries, so we should give it a chance to continue working in that area, it does not have to be supplied with refined products provided by Russian refineries, Bislimoski said. 

“Lukoil” has 40 gas stations and 10 tanks in the country with a total capacity of 8,320 cubic meters.

Bislimoski, in a statement to Truthmeter.mk, said that the possible closure of Lukoil gas stations in the country will not cause any significant changes in the Macedonian market.

This would not cause anything in Macedonia, since Lukoil’s market share in the country is small–around 7.5 percent. Everything will continue to function normally. Currently, Lukoil Macedonia does not import refined products from Bulgaria, but is supplied by local suppliers, Bislomoski tells Truthmeter.mk.

Truthmeter.mk also sent questions to the Government, asking whether it is considering taking over Lukoil’s operations in the country or introducing similar measures, whether it would provide any kind of aid package for employees if the worst-case scenario of the company’s closure materializes, and whether it would be possible for the company to continue operating if it were supplied with oil from other sources—as previously suggested by the President of the Energy Regulatory Commission Marko Bislimoski.

The Government responded only briefly:

Regarding your questions, we would like to inform you that this decision is currently being analyzed at the inter-institutional level, including its potential effects. We will inform you of any developments in due course.

 

How is Lukoil trying to react?

According to the President of the ERC, Bislimoski, Lukoil is attempting to sell itself at the group level. The company made one such attempt, but it was unsuccessful. According to some media reports, Lukoil is now seeking buyers for individual assets and trying to restructure ownership before permanent restrictions come into force. OFAC has also announced a generalized licensing regime for certain negotiations and sales (restructuring options). These transactions are challenging due to the risk that buyers could face secondary sanctions or be denied access to proceeds. Both the company and the Russian state are exerting pressure and negotiating with host countries, such as Bulgaria and Iraq, to find solutions that would allow operations to continue without directly violating international sanctions.

As the YouTube channel Joe Blogs analyzes, some of Lukoil’s foreign assets are increasingly at risk of confiscation or seizure, particularly in countries that are seeking to redefine ownership as sanctions limit banking and insurance transactions. This is not just a technical or financial crisis, but also a geopolitical struggle: some governments may take direct measures to control Lukoil’s expendable infrastructure before it is too late.

Lukoil is going through perhaps the most challenging period in its history—facing sanctions that target not only the company but its entire transportation and banking network, the sale of foreign operations to maintain liquidity, and the geopolitical risk of losing control over major facilities such as its refinery in Bulgaria.

Lukoil operates three refineries in Europe and holds stakes in oil fields in Kazakhstan, Uzbekistan, Iraq, Mexico, Ghana, Egypt, and Nigeria. It also owns hundreds of retail gas stations worldwide, including in the United States. Based on 2024 stock market reports, the value of Lukoil’s foreign assets is estimated at approximately $22 billion.

 

 

 

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