Due to sanctions, the American division of Russia's "Lukoil" is turning to small banks, as large ones have refused to cooperate

The American branch of the sanctioned Russian oil giant PJSC "Lukoil" is forced to turn to two small New Jersey banks to keep its nearly 200 gas stations operating after losing funding from larger institutions. This is reported by Bloomberg, writes UNN.

Details

Lukoil North America began working with OceanFirst Bank NA and Parke Bancorp to process transactions, as major financial institutions are unwilling to work with it due to sanctions imposed on its parent company on October 22.

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Previously, Lukoil's American unit lost its relationship with Citibank NA after Russia's invasion of Ukraine in 2022, and BCB Bancorp Inc. recently terminated its cooperation with the company.

Lukoil North America needs a financial intermediary to ensure electronic transfer of revenues to its gas station operators and to collect payments. Due to difficulties, some franchise owners have started receiving revenue by check, as electronic payments have not resumed.

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According to Bloomberg sources, OceanFirst Bank NA is currently negotiating with the Office of Foreign Assets Control to simplify electronic payments between Lukoil and its franchisees.

Although U.S. banks are temporarily allowed to process routine transactions for Lukoil's U.S. unit until April 29, many large institutions are reluctant to do so to avoid unwanted attention from the administration.

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