site.btaUPDATED Bulgaria Reacts to US Sanctions on Russia’s Lukoil

The new US sanctions targeting Russia’s largest oil companies, Lukoil and Rosneft, have sparked a wave of institutional and political reactions in Bulgaria, where Lukoil operates the country’s only oil refinery. While authorities insist that no immediate fuel shortages or price shocks are expected, concerns remain about the refinery’s ownership and national security implications.

The sanctions, announced by US President Donald Trump in his second term, are part of Washington’s response to Russia’s ongoing war in Ukraine. According to Reuters, the US Treasury said it was ready to take further action and called on Moscow to agree to an immediate ceasefire. “We encourage our allies to join us and adhere to these sanctions,” Treasury Secretary Scott Bessent said.

The Bulgarian National Bank (BNB) said it is analyzing possible effects on the domestic financial system, noting that “no direct credit risk has been identified at a systemic level.” The central bank clarified that financial institutions will independently decide how to handle clients affected by the sanctions, in line with the Measures Against Money Laundering Act and risk assessments. The BNB is coordinating closely with the Ministry of Finance and other national authorities.

Meanwhile, the Bulgarian Petroleum and Gas Association assured the public that fuel supplies are stable. Chair Svetoslav Benchev told BTA that the sanctions are “territorially limited and do not directly affect Bulgaria”. He added that fuel stocks are sufficient and that no price hikes are expected.

The Parliamentary Energy Committee approved at second reading amendments to the Investment Promotion Act, stipulating that any sale or transfer of assets of Lukoil’s companies in Bulgaria will require both a Council of Ministers decision and a positive opinion from the State Agency for National Security (SANS). The changes, proposed by MPs from GERB-UDF, MRF-New Beginning, BSP-United Left, and There Is Such a People (TISP), mandate SANS to carry out a preliminary review before transactions involving shares, company stakes, or assets of Lukoil Bulgaria EOOD, Lukoil Neftochim Burgas AD, Lukoil Aviation Bulgaria EOOD, and Sustainable Energy Supply OOD. The same applies to related entities owned by Lukoil OAO (Russia) or its affiliates, including transactions involving real estate or facilities tied to oil processing, storage, or distribution. Any transaction executed without Cabinet approval and SANS clearance will be declared null and void, the committee decided. The law will take effect upon publication in the State Gazette.

Prime Minister Rosen Zhelyazkov said that “there is no risk of a fuel crisis”, emphasizing that the Burgas refinery no longer processes Russian crude oil. He said the issue stems from ownership, as the refinery is indirectly over 50% controlled by the sanctioned Russian parent company. The government has a month to determine the best course of action to ensure the refinery continues operations without violating sanctions, Zhelyazkov said, suggesting options such as appointing a special administrator.

President Rumen Radev echoed the call for calm, stressing that preventing a fuel crisis and price rise is “the government’s most important task”. He added that the details of the sanctions remain to be clarified and warned that continued war would further escalate tensions globally.

GERB leader Boyko Borissov said his party had anticipated such sanctions and already moved to legislate stricter oversight over Lukoil’s ownership. “We were ahead of events,” he told reporters, urging vigilance and cooperation between the Finance Ministry and the BNB to mitigate risks. He added that the State Agency for National Security (SANS) and other services were monitoring the situation closely.

Delyan Dobrev, head of Parliament’s Budget and Finance Committee, also assured that “no disruptions are expected”. He recalled that Parliament had already passed a bill in first reading requiring state approval for any sale of Lukoil assets. Dobrev said the sanctions are unlikely to hinder the refinery’s normal operations but could influence a potential sale.

From the liberal opposition, Ivaylo Mirchev of Yes, Bulgaria called for urgent parliamentary hearings with the ministers of energy, economy, and finance. He warned that the refinery must not “fall into the hands of the Bulgarian mafia,” alleging that political interests could exploit the situation. Mirchev said Bulgaria must act quickly to ensure that the refinery is transferred to a “normal Western investor” to reduce Russian influence.

Former finance minister and Continue the Change leader Assen Vassilev warned that halting refinery operations would disrupt the fuel market, as Bulgaria lacks sufficient import capacity. He recalled that the previous cabinet had prepared a contingency plan, including appointing a special administrator if necessary, and urged the current government to present its plan.

Kostadin Kostadinov, leader of the nationalist Vazrazhdane party, downplayed the sanctions’ impact, saying Lukoil had been operating with non-EU suppliers since 2022. He suggested that the only risk would come from domestic political attempts to seize control of the company.

The Alliance for Rights and Freedoms (ARF) demanded a hearing in Parliament to clarify the sanctions’ scope. Deputy Chair Sevim Ali stressed that citizens must be assured of market stability, as the Burgas refinery is part of Bulgaria’s strategic energy infrastructure.

Radostin Vasilev of MECh described the sanctions as “negatively affecting Bulgaria’s national security,” arguing that continued ownership of the refinery by Lukoil poses risks to supplies and prices. His party will propose that the state invest in acquiring the refinery.

Sanctions imposed by the US on Lukoil will certainly affect the market and push prices up, Velichie MP Maria Ilieva told journalists in Parliament on Thursday. Ilieva explained that such sanctions distort market competition and could discourage foreign investors. In her words, there would be little incentive to invest in a country if investors cannot be confident that their capital is safe and protected from possible sanctions.