In a flash—just 26 seconds, to be exact—Bulgaria’s parliamentary committee made a decision that could reshape the energy landscape of the Balkans. On November 7, 2025, lawmakers voted to seize control of Neftohim, the region’s largest refinery, stripping Russian energy giant Lukoil of its shareholder rights and appointing a trustee to oversee its sale. This dramatic move, according to Bloomberg, is the culmination of years of mounting Western pressure and a decisive response to sweeping U.S. sanctions targeting Russian oil giants Lukoil and Rosneft.
The sanctions, announced by Washington on October 22, 2025, were designed to stifle the financial lifelines supporting Russia’s ongoing invasion of Ukraine, which began in 2022. For Bulgaria, the poorest member of the European Union, the impact was immediate and severe. The Neftohim refinery, perched on the outskirts of the Black Sea city of Burgas, is not just a local powerhouse—it’s the largest company in the country, boasting a projected turnover of 4.68 billion euros ($5.39 billion) for 2024, as reported by AFP. Lukoil’s dominance in Bulgaria’s wholesale fuel market, coupled with its vast network of 220 petrol stations, has made it an economic linchpin and, as many experts argue, a key instrument of Russian influence in Southeast Europe.
Martin Vladimirov, an analyst at the Sofia-based Centre for the Study of Democracy (CSD), told AFP that Lukoil’s presence in Bulgaria made it “a key part of Russian influence.” He added, “It is no coincidence that fuel prices in Romania are rising, as the refinery in Bulgaria plays a key role in supplying the Romanian market.” The Neftohim refinery’s reach extends far beyond Bulgaria, supplying vital fuel to Romania, Ukraine, Moldova, Hungary, and Austria. In Vladimirov’s words, Lukoil is “effectively a market maker for the whole of southeast Europe.”
But when U.S. sanctions hit, the refinery’s future was thrown into jeopardy. Bulgarian authorities warned that the sanctions would effectively force Neftohim to shut down, as business partners refused to transact with companies linked to Lukoil. Faced with the prospect of economic turmoil and fuel shortages, Bulgaria’s parliament swiftly adopted legal changes to place all Lukoil assets in the country under state control. The government then appointed Rumen Spetsov—a former director of the National Revenue Agency and, interestingly, a former bodybuilding champion—to take the helm of the refinery. Spetsov was handed sweeping powers to negotiate the sale of Neftohim, but only with the government’s consent.
Just hours after Bulgaria’s decisive move, the U.S. Treasury Department issued a license authorizing transactions involving certain Lukoil entities in Bulgaria, including the refinery, until April 29, 2026. This reprieve, as reported by France24, gave Bulgaria crucial breathing room to keep its energy sector afloat and avoid the worst effects of the sanctions. The U.S. also set a tight deadline: by December 13, 2025, Bulgaria must find a buyer for the refinery, with any potential contract subject to Washington’s approval.
Lukoil, for its part, has not gone quietly. On November 19, 2025, the company announced that it had taken all necessary steps to sell its Bulgarian assets, including the refinery and its sprawling network of petrol stations. But Lukoil also issued a stern warning to Bulgarian authorities, stating it “reserves the right to seek judicial remedies to protect its rights and legitimate interests.” The parent company, which shelters its foreign units in Vienna, could, if it chose to sell, wrest control of the refinery away from Sofia—a scenario that has not gone unnoticed by Bulgarian officials.
The saga of Neftohim is not unfolding in isolation. Across the Balkans, Russia’s energy dominance is facing unprecedented challenges. In Serbia, a country long seen as a Russian ally, the government is considering acquiring the shares held by Russian stakeholders in Naftna Industrija Srbije (NIS), the nation’s primary oil and gas company. NIS supplies about 80% of Serbia’s gasoline and diesel needs and more than 90% of its jet fuel and fuel oil requirements. The company failed to secure an exemption from U.S. sanctions last month, and the Serbian government is now weighing its options. President Aleksandr Vucic has indicated that, if necessary, the government would find resources to buy out the Russian shares, but he has also asked Gazprom to find a buyer. In return, Gazprom has requested that the U.S. extend NIS’s operating license while it searches for a purchaser. Some suppliers have already stopped working with NIS, and Vucic—facing mass protests at home—must convince Washington of Serbia’s intent to reduce Russian influence to avoid sanctions that could batter the Serbian economy, according to Bloomberg.
The U.S. sanctions have accelerated a process that, for years, seemed stuck in neutral. Ruslan Stefanov, chief economist at the Centre for the Study of Democracy, told Bloomberg, “The foundation of Russia’s influence is its energy dominance, established through oil and natural gas. It was impossible to break free from this Soviet-era legacy for many years. Now, that influence has largely vanished. It’s in its final throes, which is why it’s causing so much concern.”
Yet, the path ahead is riddled with uncertainty. Bulgaria has granted administrator Spetsov free rein to negotiate the sale of Neftohim, but any deal must pass muster with both the Bulgarian government and the U.S. Treasury. Meanwhile, Lukoil’s earlier attempt to sell the refinery to Geneva-based oil trading group Gunvor—described by Washington as a “Kremlin puppet”—was swiftly withdrawn after the U.S. refused to approve the deal.
Analyst Mario Bikarski of Verisk Maplecroft believes that the removal of Russian oil giants from Bulgaria and Serbia could neutralize President Vladimir Putin’s influence in the Balkans. “Opportunities for lobbying and other forms of interaction with the political and business elites of the region’s countries will diminish,” Bikarski told Bloomberg.
For now, the situation remains stable, at least in terms of fuel supply. “The situation is stable for the moment,” Vladimirov told AFP. But the clock is ticking. Should Bulgaria fail to find a suitable buyer for Neftohim by the December deadline, or if legal wrangling escalates, the region could face renewed uncertainty—and fuel markets across Southeast Europe could feel the shockwaves.
As the Balkans navigate this historic energy transition, the fate of Neftohim stands as a symbol of the shifting power dynamics in Europe. With U.S. sanctions biting deep and local governments scrambling to assert control, the era of Russian energy dominance in the region may finally be drawing to a close.
