Russian Lukoil declares force majeure in Iraq oilfield amid sanctions
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Russian oil giant Lukoil declares force majeure at West Qurna‑2 after sanctions disrupt operations and Iraq suspends payments.
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A person walks near the building of the Lukoil headquarters in Sofia, Bulgaria, Tuesday, Oct. 28, 2025 (AP)
Lukoil has declared force majeure at Iraq’s massive West Qurna-2 oilfield after Western sanctions on the Russian oil giant complicated its operations, Reuters reported, citing four sources familiar with the matter.
Iraq has suspended all cash and crude payments to Lukoil, three of the sources said, a move that disrupted the company’s revenue flow and created operational challenges at the West Qurna-2 oilfield, ultimately prompting Lukoil to declare force majeure.
What is force majeur?
Force majeure is a legal concept that allows a party to suspend or be excused from fulfilling contractual obligations when extraordinary events beyond their control, such as natural disasters, wars, pandemics, sanctions, or government actions, make performance impossible or impractical.
In October 2025, the US and the UK imposed new sanctions on Lukoil, citing its continued support of Russia’s oil industry amid the war in Ukraine. The measures include barring access to the US banking system, applying secondary sanctions, and placing restrictions on Lukoil’s international subsidiaries.
As a result, Lukoil’s ability to conduct transactions in US dollars has been severely restricted. Planned asset sales abroad now face greater regulatory scrutiny, particularly from the US Treasury's Office of Foreign Assets Control, while European allies are being pushed to align with the enforcement framework.
These sanctions have placed considerable strain on Lukoil’s global business, disrupting revenue streams and complicating its operational commitments in countries where it maintains long-term energy contracts and infrastructure.
