On October 22, 2025 the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil), placing both companies, including all majority held subsidiaries worldwide, on the Specially Designated Nationals and Blocked Persons (SDN) List. The sanctions apply to any entity that is owned, directly or indirectly, individually or in the aggregate, 50 percent or more by Rosneft, Lukoil, including but not limited to 34 designated subsidiaries.
The sanctions come in response to Russia’s continued war in Ukraine, with the objective of pressuring Russia into agreeing to an “immediate ceasefire” by “increase[ing] pressure on Russia’s energy sector and degrad[ing] the Kremlin’s ability to raise revenue for its war machine and support its weakened economy.”
As a result, US persons, companies, and banks are prohibited from engaging in or facilitating any direct or indirect dealings with Rosneft or Lukoil and their subsidiaries unless authorized by a general or specific license. In addition, non-US persons and companies are prohibited from utilizing the US financial system in processing transactions involving or benefiting these entities.
Summary of General Licenses issued (or reissued) today in connection with the action:
- General License 124A - Authorizes petroleum services and other transactions involving Lukoil and Rosneft related to the Caspian Pipeline Consortium and Tengizchevroil projects.
- General License 126 - Authorizes the wind down of transactions involving Rosneft or Lukoil. All wind down activities must be completed by 11:59 PM EST on November 21, 2025, and payments to these entities must be placed in blocked accounts—no value may be transferred.
- General License 127 - Permits certain transactions related to US divestment of (i) debt or equity of Rosneft or Lukoil, and (ii) derivative contracts involving these entities.
- General License 128 - Authorizes certain transactions involving Lukoil retail service stations located outside of Russia.
Considerations for companies engaged in transactions with Rosneft, Lukoil, or their subsidiaries:
Companies engaged in ongoing dealings with Rosneft, Lukoil, or their subsidiaries should consider (i) their ability to take advantage of General License 126 for authorized wind down, (ii) contractual issues related to force majeure and early termination, and (iii) potential secondary sanctions risks for foreign financial institutions. Further, any measures taken must also account for the recent UK sanctions on Rosneft and Lukoil which have a separate wind down period. (Please refer to the linked alert for more information on the UK sanctions action.)
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