Gunvor, the Swiss commodities trader, has withdrawn its bid to buy the international assets of Russia’s Lukoil after the US Treasury Department publicly opposed the transaction and labeled the firm “the Kremlin’s puppet,” leaving Lukoil’s global portfolio in legal and commercial uncertainty.

The aborted deal, reportedly valued at roughly $20 billion, is the latest sign of a stepped-up US effort to choke Russia’s oil revenues amid the war in Ukraine.

Treasury rebuke, Gunvor’s response

On Thursday, the US Treasury Department posted on X: “As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit.”

The public rebuke made clear Washington would be unlikely to issue any authorization or sanctions relief that would enable the transfer of Lukoil’s foreign assets to a non-Russian buyer.

Shortly after the Treasury post, Gunvor said it would withdraw its offer. The firm disputed Washington’s characterization as “fundamentally misinformed and false” and said it had for years distanced itself from Russian interests, halted sanctioned trading, and publicly condemned the war in Ukraine.

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Why the deal collapsed, sanctions, finance, geopolitics

Even before Washington’s intervention, the transaction faced formidable obstacles. Western banks and financing partners have grown wary of large deals tied to sanctioned Russian firms, and analysts warned that acquiring Lukoil’s sprawling foreign holdings, refineries in Europe, stakes in Middle Eastern and Central Asian fields, and global retail networks would be complex and risky.

Reports circulating during the sale process placed a potential valuation of Lukoil’s international arm at around $20 billion.

The US moves against Lukoil are part of an expanded October sanctions push that targeted Russia’s oil sector and raised the spectre of secondary sanctions on financial institutions and counterparties that transact with designated Russian energy companies. That legal backdrop made any buyer’s access to financing and insurance highly uncertain. 

The collapse of the Gunvor bid has immediate regional implications. Bulgarian authorities are drafting legal amendments aimed at enabling the seizure and resale of Lukoil’s Burgas refinery, the country’s only such facility, to prevent a shutdown that could jeopardise domestic fuel supplies should sanctions escalate.

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