TheChek News Flow

Torbjörn Törnqvist has just struck one of the deals of his lifetime, pouncing on the overseas operations of Lukoil soon after the Russian oil producer was hit with U.S. sanctions.

If Washington and London approve it, the acquisition will solve a major headache for Russia—and in the process, vastly expand the scope of the 71-year-old commodity trader’s energy empire. Gunvor, the formidable Swiss trading business he founded with an associate of Vladimir Putin, will swell to absorb gas stations from the Bronx to Sicily, refiners dotted across Europe and oil fields in the Middle East and Central Asia.

The rapid-fire deal announcement came just three days after Lukoil said it was selling the assets—a signature move for Törnqvist, who has a record of moving fast and decisively to beat out competitors, said people who have worked or dealt with the billionaire.

The accord risks reigniting scrutiny of Törnqvist’s history in post-Soviet Russia. At the same time, it shows how President Trump’s economic assault on Russia has set off a reordering of the opaque oil-trading industry—where billions of dollars of crude flow daily, supplying the global economy and enriching middlemen like Törnqvist.

Neither Lukoil nor Gunvor disclosed a price or said how the deal will be structured. A former colleague who worked on another major acquisition in 2012 said even Törnqvist may not have all the answers yet. “If he sees a deal and thinks it is a good deal, he will do it,” the person said.

People following the sales process suggested it could value Lukoil’s international arm at very roughly $20 billion. Bankers said they want to know what Geneva-based Gunvor is paying, how the deal will be funded and whether Törnqvist gave Lukoil any assurances it can buy the business back when the Ukraine war ends.

“Torbjörn has made no such assurances to anyone. No such buy-back clause exists,” Gunvor spokesman Seth Pietras said. He added the company has sought permission from U.S. and U.K. sanction authorities to do the deal.

Lukoil’s terse announcement sent shock waves through the close-knit energy-trading world. Rival executives were still running the rule over Lukoil’s assets, said people familiar with the sale. Some hadn’t yet figured out how to negotiate with a company under both U.K. and U.S. sanctions.

Gunvor could move fast partly because it was already speaking to Lukoil about buying some assets, said Pietras, the spokesman.

The purchase reflects the high tolerance for risk at commodity houses like Gunvor—which often trade in volatile markets, lend to companies and governments that can’t borrow elsewhere and strike deals in countries facing political turmoil, conflict and sanctions.

Market upheavals due to the pandemic and the Ukraine war have made the business exceptionally lucrative. Last year Gunvor—which means “vigilant in war” in Old Norse and is also the middle name of Törnqvist’s mother—earned $729 million on $136 billion in revenue, one of its best years ever.

“Traders traditionally have more appetite for political risk than an oil major would and right now, they also have money burning in their pockets,” said Craig Pirrong, a professor at the University of Houston who researches commodity traders.

Still, funding this deal could be tricky, since Western banks are wary of transactions involving Russia. Details are still being finalized but the most likely arrangement is for Gunvor to set aside a slice of future profits from the operations for Lukoil to claim post-war, people familiar with the matter said.

Törnqvist grew up in Stockholm, where he studied business. He started his career at BP in the 1970s, as oil markets were opening up after the shock of the Arab oil embargoes. After stints at two trading firms, he struck out on his own in the mid-1990s with a venture selling Russian fuel oil from Estonia.

Westerners were descending on the former Soviet Union to trade oil and metals. Soon, he teamed up with Gennady Timchenko, a former Soviet trade official who knew Putin from St. Petersburg, where the future president worked in the mayoralty. The pair founded a precursor to Gunvor in 1997.

After Timchenko bought a mansion overlooking Lake Geneva in 2003, Törnqvist bought a property across the road. Both are keen tennis players.

The duo vaulted into the big trading leagues around that time, when Törnqvist learned Moscow was about to seize oil fields from Putin critic Mikhail Khodorkovsky. Gunvor swiftly made arrangements to keep the crude flowing to global markets, he told the authors of “The World for Sale,” a book published in 2021.

The move transformed the niche Baltic outfit into one of the world’s biggest trading operations. At one point, Gunvor handled as much as 30% of Russia’s seaborne crude exports. Pietras said the firm’s edge was its logistical capability.

“We don’t deny we have excellent contacts,” Törnqvist told Reuters in a rare interview in 2007. But “to involve Mr. Putin and any of his staff in this dialogue is speculation,” he added.

The following year, Timchenko described rumors he’d worked for Russian security organs as a “fairy tale” in a Wall Street Journal interview, and said he was too busy to see Putin, his old acquaintance and judo partner.

After Russia annexed Crimea in 2014, U.S. sanctions on Timchenko brought the firm close to collapse. The Obama administration said Putin himself had investments in Gunvor and may have had access to its funds, accusations the firm denied as “misinformed and outrageous.”

To save his company, Törnqvist bought Timchenko’s shares. He sold Russian assets and built new lines of business, especially in liquefied natural gas and in the U.S.

“Gunvor cleaned up their act after the Russia sanctions but the whole company is historically based on Russian business, connections and know-how,” said Adi Imsirovic, an energy lecturer at the University of Oxford and former trading executive at Russia’s Gazprom.

Törnqvist, whom associates describe as softly spoken but prone to frustration if high standards aren’t met, expanded in the U.S. He poured money into sailing, sponsoring an America’s Cup team and pushing for the competition to become more of a high-tech, extreme sport.

“I like competition, and in sailing I’ve been able to compete on the highest level,” he told the Journal in 2017.

Törnqvist never entirely severed dealings with Russia. Gunvor remained a sizable exporter of petroleum and kept a stake in a huge St. Petersburg terminal. The company’s spokesman said it hadn’t been possible to sell. Like other commodity trading heads, Törnqvist visited the Moscow headquarters of state-owned Rosneft until the 2022 invasion of Ukraine, said people familiar with their meetings.

However, Gunvor swiftly dialed back its trading activity after Putin attacked Ukraine, according to shipping data and people familiar with its activities.

The Lukoil deal, the biggest in a spree of recent acquisitions, creates options for Törnqvist’s eventual departure. He has said he would like to keep Gunvor, where his son Fredrik is an executive, in the family. If that doesn’t pan out, a company with substantial assets might prove easier to sell than a hard-to-value trading firm. For now, though, Törnqvist shows no signs of planning to tap the brakes.