European nations scramble for Lukoil’s assets as US sanctions loom

According to the news agency Bloomberg, a fierce struggle has begun in Europe for the assets of the Russian energy company Lukoil.

A number of European countries are requesting that the US postpone the implementation of sanctions.

Romania has indicated it may purchase the refinery within its territory, keeping nationalization on the table as a “last resort.”

According to the report, some European countries are pressuring the US for licenses to continue using Lukoil’s refineries even after the sanctions take effect.

‘A real fight is happening’

Richard Bronze, head of geopolitics at Energy Aspects Ltd., commented on the issue, stating, “After the US Treasury Department rejected Gunvor’s offer to fully acquire these assets, a real fight is happening over how to handle Lukoil’s foreign assets.”

Bronze noted that while there is a reserve in global crude oil markets that can offset supply disruptions, the situation in the refining sector is entirely different.

According to Bloomberg, many countries are pressuring the US to grant licenses so that Lukoil’s assets can continue operating after November 21.

In the past, the Donald Trump administration granted such permits for sanctioned Russian assets in similar situations.

However, it is stated that if the deadline is not extended this time, serious turmoil could occur in the crude oil and fuel markets.

Bulgaria is taking control, Romania is considering a purchase

According to the news agency, Bulgaria has taken steps to establish full control over the country’s largest refinery. With this move, the Sofia government aims to ensure the plant’s uninterrupted operation and protect employment.

Meanwhile, it has been reported that some gas stations in Finland are on the verge of running out of fuel.

In Romania, sources familiar with the matter said that the deadline for the sanctions to take effect could be extended.

Bloomberg reported that the nationalization of Lukoil’s assets in Romania is being considered only as a “last option.”

Previously, Politico magazine wrote that Romania and Bulgaria would ask the US to delay new sanctions on Russia’s oil sector until these countries find alternative fuel supply sources.

In Bulgaria specifically, Russian-owned refineries supply up to 80% of the country’s fuel needs.

Radu Burnete, an economic adviser to the Romanian President, also mentioned that the government could purchase Lukoil’s assets in the country.

Describing the purchase option as “a possibility that should not be ruled out,” Burnete emphasized that Lukoil would nevertheless decide for itself to whom it sells its assets.

Background of the sanctions

At the end of October, the US began imposing sanctions on Lukoil and its subsidiaries, giving a one-month period to terminate all transactions with the company.

This period is expected to expire on November 21.

Following this development, Lukoil announced its intention to sell its foreign assets. One of the potential buyers, the oil trading company Gunvor, withdrew its offer shortly thereafter.