site.btaUS Sanctions on Lukoil and their Implications for Bulgaria: Explainer

On October 22, 2025, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) expanded its sanctions on Russia by designating that country's two largest oil companies, Rosneft and Lukoil, under Executive Order 14024. The idea is to step up economic pressure on Russia's energy sector, which is a critical source of revenue for the Kremlin's military operations in Ukraine.

What the sanctions envisage

All property and interests in property of these companies and their subsidiaries that fall under US jurisdiction, are blocked, and US persons and entities are prohibited from engaging in transactions with them without authorization.

Foreign financial institutions are exposed to potential secondary sanctions if they facilitate significant transactions involving these designated entities.

Lukoil's Bulgarian asset

In Bulgaria, Lukoil owns Lukoil Neftochim Burgas, the largest oil refinery in the Balkans, through its Swiss-registered subsidiary Litasco, which holds a 89.97% stake in the facility. Another 9.88% of the refinery belong to another Lukoil affiliate, Lukoil Oil Company. The remaining 0.15% of the capital is distributed among over 7,700 individual and corporate shareholders.

Lukoil also owns Lukoil Bulgaria, a leading Bulgarian motor fuel retail company, via Litasco.

According to the Commission for Protection of Competition, Lukoil Bulgaria has a relatively large market share in this country and is a market leader in the wholesale of automotive fuel, with a share fluctuating between 40-50% and 50-60%.

It is Lukoil's 89.97% shareholding via Litasco that places these key Bulgarian energy assets directly within the scope of the sanctions. The sanctions are expected to affect its ability to operate normally within the global financial system, potentially limiting its access to international banking services and supply chains that rely on US dollars or entities.

This has raised concerns in Bulgaria regarding the security of fuel supply and economic impacts, prompting the government to explore legal and administrative options to ensure the refinery's continued operation and mitigate disruptions of the country's energy infrastructure.

In January 2025, Prime Minister Rosen Zhelyakov sited unofficial sources as saying that Russia's Lukoil is planning to sell its oil refinery in Bulgaria for some USD 2 billion. The same month, Reuters quoted Kazakhstan's state oil and gas company KazMunayGaz as saying that Lukoil had invited it to participate in a tender to acquire the refinery. According to the same story, Hungary's Prime Minister Viktor Orban said that MOL was one of seven bidders in the tender.

There have also been calls for re-nationalization of the oil refinery, which was privatized by stages between 1997 and 2009.