Trump Administration Blocks Gunvor Takeover of Russian Oil Assets
The Treasury Department’s move comes as U.S. ratchets up economic pressure on Moscow
Gunvor withdrew its offer to acquire Lukoil’s international assets after the Treasury Department opposed the deal.
The Treasury Department labeled Gunvor the ‘Kremlin’s puppet’, escalating Washington’s economic pressure on Moscow.
Lukoil’s global network, potentially valued at around $20 billion, faces uncertainty following the aborted deal.
Gunvor pulled its offer to buy the international assets of sanctioned Russian oil producer Lukoil after the U.S. Treasury Department said it opposed the deal and called the Swiss commodities trader the “Kremlin’s puppet.”
The move signals the Trump administration is taking a hard-line approach in its recently launched effort to use economic pressure on Moscow to end the war in Ukraine.
Last month, Washington ratcheted up sanctions on Russia with a direct focus on its oil companies, including Lukoil. Soon after the blacklisting, Lukoil struck a deal with Gunvor, a firm with a rich history in post-Soviet Russia, for its international assets.
“As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit,” the Treasury Department said in a post on X late Thursday.
Shortly after, Gunvor said it withdrew its offer for Lukoil’s assets. It disputed the Treasury Department’s statement, calling it “fundamentally misinformed and false.”
The public rebuke of Gunvor marked an escalation in Washington’s effort to strangle Russia’s oil income, which has fueled Moscow’s war on Ukraine. The aborted deal also leaves Lukoil’s global network—a portfolio spanning major refineries in Europe, oil fields in the Middle East and gas stations around the world—hanging in the balance.
A Lukoil spokesperson didn’t immediately respond to a request for comment.
With the U.S. threatening secondary sanctions on banks and counterparties that transact with them, Lukoil’s overseas assets are at a heightened risk of governmental seizures or shutdown. In Bulgaria, the governing coalition is preparing legal amendments that would enable it to take control of Lukoil’s refinery there—the country’s only such facility—to prevent a shutdown that could endanger the nation’s fuel supply.
For Gunvor, the collapsed deal reignited scrutiny about its history with Russia. The trader’s co-founder, Gennady Timchenko, a close associate of President Vladimir Putin, was sanctioned by the U.S. in 2014. At the time, Washington said Putin himself had investments in Gunvor and may have had access to its funds, accusations the firm has denied as “misinformed and outrageous.”
To save his company, Gunvor’s other co-founder, Torbjörn 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 further dialed back its trading activity with Russia after the 2022 invasion of Ukraine.
Gunvor on Thursday said “the company 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.”
Even before the Treasury Department’s statement, the deal was already facing challenges. Funding it would have been tricky, since Western banks are wary of transactions involving Russia.
Lukoil and Gunvor hadn’t disclosed a price or said how the deal would be structured. People following the sales process had suggested it could value Lukoil’s international arm at around $20 billion.