Gunvor Drops Bid for Lukoil’s Overseas Assets After U.S. Calls It ‘Kremlin’s Puppet’

Global commodity trader Gunvor has withdrawn its proposal to acquire Lukoil’s international assets after the U.S. Treasury Department signaled it would block the transaction and labeled the company a “Kremlin puppet,” marking a dramatic collapse of what would have been one of the most significant asset sales stemming from Western sanctions on Russia.

The Treasury Department issued the statement via social media: “President Trump has been clear that the war must end immediately. As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit.”

Gunvor fired back immediately, calling the Treasury’s characterization “fundamentally misinformed and false.” The company stated: “Gunvor is and has always been open and transparent about its ownership and business, and has for more than a decade actively distanced itself from Russia, stopped trading in line with sanctions, sold off Russian assets, and publicly condemned the war in Ukraine.”

The trading house confirmed it was withdrawing from the deal, stating: “We welcome the opportunity to ensure this clear misunderstanding is corrected. In the meantime, Gunvor withdraws its proposal for Lukoil’s international assets.”

Lukoil, Russia’s second-largest oil company, had accepted Gunvor’s offer to purchase Lukoil International GmbH, which controls the company’s foreign assets, after Washington imposed sanctions in late October. The transaction would have represented “the most consequential action so far by a Russian company resulting from Western sanctions imposed over the war in Ukraine.”

The deal was subject to approval from the Treasury’s Office of Foreign Assets Control, with an existing license giving companies until November 21 to wind down transactions with Lukoil and fellow sanctioned entity Rosneft.

Gunvor rose to prominence in the 2000s as the world’s biggest trader in Russian oil, and its shareholders at the time included Gennady Timchenko, a close ally of President Vladimir Putin.

However, Timchenko sold his stake in Gunvor after the U.S. targeted him with sanctions following Russia’s 2014 annexation of Crimea. The company has maintained that it has actively distanced itself from Russian operations for more than a decade.

The collapsed deal would have transferred significant energy infrastructure across multiple continents. Lukoil’s foreign portfolio includes Iraq’s West Qurna 2 oil field—one of the world’s largest, with output topping 480,000 barrels per day—in which Lukoil holds a 75% stake.

The package also included the 190,000 barrel-per-day Lukoil Neftohim Burgas refinery in Bulgaria, the largest in the Balkans, as well as the Petrotel refinery in Romania. Lukoil’s foreign operations extend to oil terminals, retail fuel chains in Europe, and upstream and downstream projects in Central Asia, Africa, and Latin America.

Moscow-headquartered Lukoil accounts for approximately 2% of global oil output.

The deal’s collapse leaves Lukoil scrambling for alternatives as the November 21 deadline approaches, with the company previously indicating it would seek an extension of the current license if necessary.

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