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Russia’s Lukoil, which was sanctioned by the United States last week, has responded by selling its overseas assets to the Gunvor Group, based in Switzerland. Gunvor is among the world’s largest oil traders, 85% owned by Swedish billionaire Torbjörn Törnqvist. The remaining equity is held by its employees. Lukoil is Russia’s second-largest oil producer, accounting for around 2% of global output.
By the end of 2024, Lukoil maintained a retail network of some 2,500 fuel stations in 20 countries, exporting 730,000 barrels of crude per day and around 300,000 bpd of petroleum products. It reported a 2024 net profit of US$10 billion.
Swiss-based Gunvor Group is one of the top oil traders in the world, along with Vitol, Glencore, and Trafigura. The firm’s equity stood at US$6.5 billion at the end of 2024. Gunvor Group was co-founded by Russian businessman Gennady Timchenko in 2000, but he sold his share in the company in 2014.
The value of the deal, which still needs clearance from the US government, has not been announced.
Lukoil stated that it was selling its foreign assets “due to restrictive measures of some states introduced against the company and its subsidiaries.”
Under the sanctions, Lukoil has until November 21 to cease its ongoing overseas operations. But Lukoil and Gunvor could apply for an extension in order “to ensure uninterrupted operations of international assets and their banking servicing for the period until the completion of the transaction,” according to the US Treasury.
The style of the transaction is similar to China’s TikTok American operations, which was purchased by a consortium of US investors after it was sanctioned by the US Government. This illustrates that sanctions are being used against multinational corporations to reduce their immediate value and then have their assets purchased by the United States and its allies at reduced rates or face bankruptcy.
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