Opinion: Trump sanctions on Lukoil, Rosneft could reshuffle global oil map
U.S. sanctions against Russian oil majors Lukoil and Rosneft could trigger a structural reshaping of the global oil sector over the next year, reversing Moscow's decades-long efforts to expand its international clout through energy investment.
When President Donald Trump in October slapped sanctions on Rosneft and Lukoil, which together account directly or indirectly for around two-thirds of Russia’s oil exports, the U.S. struck at the core of the Kremlin’s revenue base. The measures formally took effect on November 21.
Russia’s oil and gas revenues, representing around a quarter of federal income, are estimated to have fallen in November by roughly one-third year-on-year, according to calculations.
Fossil fuel earnings for Russia, the world's second-largest oil exporter, are now at their lowest level since international sanctions were imposed after Moscow's invasion of Ukraine in 2022.
Turkey, India and Brazil have already reduced purchases of Russian crude, and traders are struggling to place cargoes, leaving a record volume of Russian oil floating at sea. China will likely absorb some of these volumes, but Moscow may be forced to sell at an even greater discount.
Earlier measures - price caps, diplomatic pressure and maritime restrictions - had only a partial effect on Moscow's finances because they targeted logistics and financing rather than directly taking aim at the corporate heart of Russia's oil sector. Washington has raised the stakes significantly by showing that Russia's largest oil companies are no longer too big to sanction.
From dominance to divestment. The forced sale of Lukoil’s and Rosneft’s assets across Europe, the Middle East, Africa and Latin America could now reshuffle ownership of large fields and refineries and reroute global supply chains. Importantly, the permanent loss of Russian corporate presence in key hubs would alter long-term investment patterns and trading relationships, not just short-term flows.
Lukoil’s scramble to offload its $22-B international portfolio before temporary U.S. authorization expires on December 13 could open the way for U.S. oil majors and Western investors to reclaim strategic ground from Moscow.
Interest is concentrated in Lukoil’s most lucrative upstream stakes: Iraq’s West Qurna-2 field; shares in Kazakhstan’s Karachaganak and Tengiz fields; Azerbaijan’s Shah Deniz field; and assets stretching from Mexico and Ghana to Nigeria and Egypt.
Downstream, the shift is equally significant. Lukoil’s refineries in Bulgaria, Romania and the Netherlands, pillars of Russian energy influence in Europe, will need to be divested if these sanctions remain in place.
In Finland, Lukoil's subsidiary is already planning to shut more than 400 service stations after the government declined to seek exemptions.
While Lukoil has secured a waiver to allow it to continue operating hundreds of retail outlets across the U.S., Belgium, the Netherlands and the Western Balkans, its market share in these regions is already limited.
Eastern Europe unwinds Russia leverage. The most dramatic changes are unfolding in Eastern Europe.
In Bulgaria, where Lukoil’s integrated refining and retail presence provided Moscow with deep commercial leverage, the government has installed a state manager and launched a divestment process that must conclude by April 29.
Romania has opted for full sanctions compliance, accelerating the sale of the Petrotel refinery, while Moldova has taken control of Lukoil’s aviation fuel infrastructure to protect supply stability.
Hungary and Slovakia, where Lukoil has long supplied nearly all crude imports through the Druzhba pipeline, are currently the only two European Union member states still importing Russian barrels under a specific EU sanctions exemption.
They have alternatives, however. The underused Adria pipeline from Croatia can deliver around 480,000 bpd of non-Russian oil, which is enough to cover all of the region's demand.
Hungarian Prime Minister Viktor Orban secured a temporary U.S. waiver allowing oil and gas company MOL to continue purchases, but the exemption is limited to one year. If Hungary refuses to halt these purchases, it would likely become Russia’s last significant foothold in the EU oil market.
Reclaiming strategic space. The new sanctions could also reshape refined product markets where Lukoil and Rosneft play a major role.
With the closure of the EU's "refining loophole" from January, major transshipment hubs that imported large volumes of Russian crude in order to re-export refined products back into Europe will be forced to scale back. The EU sanctions also targeted India's Nayara refinery whose main shareholder is Rosneft.
But gaps remain. Enforcing these refined product restrictions will be challenging. And EU authorities still lack systematic visibility into whether products sent from large net oil‑exporting states, such as Egypt and the United Arab Emirates, are derived from Russian crude.
Moreover, until this point, the global energy market has adapted to keep Russian oil flowing, including the development of large "shadow fleets" - tankers that operate outside of Western financial systems.
But we now appear to be at a turning point. For years, Russia used its energy companies to expand its political and economic reach into Europe, the Middle East and beyond. A decisive shift in the balance of power in global energy could now be underway.
The views expressed here are those of Martin Vladimirov, Director of the Geoeconomics Program of the Center for the Study of Democracy (CSD).
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