Trump's sanctions against Lukoil and Rosneft could change the global oil map - Reuters

U.S. sanctions against Russian oil giants Lukoil and Rosneft could trigger a structural overhaul of the global oil sector over the next year, undermining Moscow’s years-long efforts to expand its international influence through energy investments, Reuters reports, according to UNN.

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When President Donald Trump imposed sanctions in October on Rosneft and Lukoil — companies that together directly or indirectly account for about two-thirds of Russia’s oil exports — the United States struck at the very core of the Kremlin’s revenue base. The measures officially took effect on November 21.

Russia’s oil and gas revenues, which make up roughly a quarter of federal income, fell by about one-third year-on-year in November, according to Reuters estimates.

Russia’s fossil fuel income — as the world’s second-largest oil exporter — is now at its lowest level since international sanctions were imposed following Moscow’s invasion of Ukraine in 2022.

Turkey, India, and Brazil have already reduced purchases of Russian crude, and traders are struggling to place cargoes, leading to record volumes of Russian oil floating at sea. China will likely absorb some of these volumes, but Moscow may be forced to sell at even steeper discounts.

Earlier measures — price caps, diplomatic pressure, and maritime restrictions — had only a partial impact on Moscow’s finances because they targeted logistics and financing rather than the corporate heart of Russia’s oil sector. Washington has significantly raised the stakes, demonstrating that Russia’s largest oil companies are no longer "too big to sanction."

From leadership to forced sales

The forced sale of Lukoil’s and Rosneft’s assets across Europe, the Middle East, Africa and Latin America could now reshuffle ownership of major oil fields and refineries and reroute global supply chains. Crucially, the permanent loss of Russian corporate presence in key hubs will alter long-term investment patterns and trading relationships, not just short-term flows.

Lukoil’s rush to offload its international portfolio worth $22 billion before temporary U.S. authorization expires on December 13 could pave the way for U.S. oil majors and Western investors to reclaim strategic ground lost to Moscow.

The greatest interest is focused on Lukoil’s most lucrative upstream assets: Iraq’s West Qurna-2 field; stakes in Kazakhstan’s Karachaganak and Tengiz fields; Azerbaijan’s Shah Deniz field; and assets stretching from Mexico and Ghana to Nigeria and Egypt.

Downstream shifts are equally significant. Lukoil’s refineries in Bulgaria, Romania and the Netherlands — pillars of Russian energy influence in Europe — will have to be sold if the sanctions remain in force.

In Finland, Lukoil’s subsidiary already plans to close more than 400 service stations after the government declined to seek exemptions.

Although Lukoil has secured a waiver allowing it to continue operating hundreds of retail outlets in the U.S., Belgium, the Netherlands and the Western Balkans, its market share in these regions is already limited.

Russian influence in Eastern Europe rapidly weakens

The most dramatic changes are unfolding in Eastern Europe.

In Bulgaria, where Lukoil’s integrated refining and retail network had provided Moscow with considerable commercial leverage, the government has appointed a state manager and launched a divestment process that must conclude by April 29.

Romania has opted for full sanctions compliance, accelerating the sale of the Petrotel refinery, while Moldova has taken control of Lukoil’s aviation fuel infrastructure to safeguard supply stability.

Hungary and Slovakia — long dependent on Lukoil’s supplies through the Druzhba pipeline — are now the only EU states still importing Russian oil under a special exemption.

However, they have alternatives. The underused Adria pipeline from Croatia can supply around 480,000 barrels per day of non-Russian oil — enough to meet the region’s entire demand.

Hungarian Prime Minister Viktor Orbán obtained a temporary U.S. waiver allowing MOL to continue purchases, but the exemption lasts only one year. If Hungary refuses to halt these imports, it may become Russia’s last significant foothold in the EU oil market.

Return of strategic space

The new sanctions could also reshape refined product markets, where Lukoil and Rosneft play major roles.

With the EU’s "refining loophole" closing in January, major transshipment hubs that imported Russian crude to re-export refined products back to Europe will be forced to scale down operations. EU sanctions have also targeted India’s Nayara refinery, whose main shareholder is Rosneft.

But gaps remain. Enforcing refined product restrictions will be difficult, and EU authorities still lack systematic visibility into whether products shipped from major net-exporting countries such as Egypt and the UAE are derived from Russian crude.

Moreover, until now, the global energy market had adapted to keep Russian oil flowing, including through the development of large "shadow fleets" — tankers operating outside Western financial systems.

But we now appear to be at a turning point. For years, Russia used its energy companies to expand its political and economic reach in Europe, the Middle East and beyond. A decisive shift in the balance of power in the global energy market may now be underway.

(The views expressed here are those of Martin Vladimirov, Director of the Geoeconomics Program at the Center for the Study of Democracy (CSD).)