The energy war between Russia, Ukraine, and the West has entered a volatile new phase, with sanctions, drone strikes, and infrastructure attacks reshaping the landscape for millions across Europe and beyond. As winter approaches, the consequences of these maneuvers are being felt from the fuel pumps of Bavaria to the blacked-out apartment blocks of Kyiv, and the ripple effects are only intensifying.
On November 10, 2025, Lukoil PJSC—Russia’s second-largest oil producer—began a frantic sell-off of its overseas assets, including major refineries in Bulgaria, Romania, and the Netherlands. This move, reported by Argus Media and Oilprice.com, was triggered by the latest round of U.S. sanctions targeting Russia’s energy sector. The U.S. Office of Foreign Assets Control (OFAC) set a wind-down deadline of November 21 under General License 126, leaving Lukoil scrambling to comply.
Lukoil’s international business has long been a cornerstone of its operations, with the Burgas refinery in Bulgaria alone supplying over two-thirds of the country’s fuel needs. The Petrotel plant in Romania processes 2.4 million tons of crude annually, and a 45% stake in the Zeeland complex in the Netherlands further deepens Lukoil’s European footprint. The sudden forced divestiture of these assets has sent shockwaves through Europe’s energy market.
Initially, Swiss trader Gunvor Group stepped in, agreeing to acquire Lukoil International for an estimated $12-14 billion. But the deal quickly unraveled when OFAC withheld approval, leaving the fate of these critical refineries in limbo. The urgency is palpable: the Burgas plant alone covers 80% of Bulgaria’s fuel demand, and any disruption could spark shortages across the Balkans, where Lukoil also operates networks in Serbia, Montenegro, North Macedonia, and Moldova. In Romania, Energy Minister Sebastian Burduja has warned that the Petrotel refinery must switch to non-Russian crude or shut down, risking hundreds of jobs. The Netherlands, too, is bracing for a rapid transition to prevent supply gaps.
The sanctions, imposed on October 22, 2025, also hit Russian energy giant Rosneft. According to Argus Media, together, Lukoil and Rosneft account for over 5% of global oil output and two-thirds of Russia’s 4.4 million barrels per day of crude exports. These are not just numbers—they represent lifelines for economies from Western Europe to Asia.
The European Union has not stood idle. Its 19th sanctions package, announced on October 23, bans Russian LNG imports from January 2027, with short-term contracts ending within six months. Yet, the policy is riddled with contradictions. While some Rosneft subsidiaries in Germany are exempted to ensure fuel continuity, Lukoil’s minority stakes in Caspian projects—touted as alternatives to Russian energy—are caught in the crossfire, causing traders to steer clear of any Russian involvement.
The shockwaves have traveled far beyond Europe. In Iraq, state oil marketer SOMO canceled three crude shipments from Lukoil’s West Qurna-2 field, scheduled for November 11, 18, and 26, citing sanction fears. This field, where Lukoil holds a 75% stake, produces over 400,000 barrels per day, and the cancellations disrupt not just Lukoil’s Geneva-based trader Litasco but global crude balances as well.
The impact on European consumers has been swift and punishing. Since October, Germany’s diesel import costs have soared 25%, with pump prices in Bavaria hitting €1.85 per liter—the highest since the 2022 crisis, according to Argus Media. The combination of sanctions and Ukrainian drone strikes on Russian refineries has cut Moscow’s seaborne refined product exports by 500,000 barrels per day since September, tightening supplies as Europe prepares to ban Russian crude-derived fuels from January 2026.
Western oil majors, meanwhile, are cashing in. Exxon Mobil reported a 15% year-over-year jump in third-quarter refining profits to $1.8 billion, fueled by a 20% surge in global cracks as Russian barrels are rerouted to Asia at discounts. Chevron’s downstream margins reached a record $8.50 per barrel, with upstream earnings of $3.3 billion. As Amy Myers Jaffe of NYU’s Center on Global Energy Policy put it, “Sanctions are rerouting Russian barrels to Asia at discounts, leaving premium product for the West—and higher costs for Europe.”
But the energy war is not just about oil and gas. In Ukraine, the stakes are existential. On November 9, Kyiv and many other regions endured power cuts lasting eight to sixteen hours after massive Russian missile and drone attacks on energy infrastructure. State provider Ukrenergo scheduled further restrictions for November 10, citing “the consequences of massive Russian missile and drone attacks on energy facilities.”
According to Ukrenergo spokeswoman Svitlana Hrynchuk, “It is difficult to recall such a [large] number of direct strikes on energy facilities since the beginning of the invasion.” President Volodymyr Zelensky told the nation, “Repair crews are working almost around the clock in most regions. Restoration efforts are ongoing, and although the situation is difficult, thousands of people are involved in stabilizing the system and repairing the damage.”
The attacks have not only plunged cities like Kremenchuk—population 200,000—into complete blackout, prompting the opening of emergency public hubs, but have also raised fears for nuclear safety. Russian strikes targeted substations supplying two Ukrainian nuclear facilities. Foreign Minister Andriy Sybiha warned, “These were not accidental, but well-planned strikes. Russia is deliberately jeopardizing Europe’s nuclear safety.”
The International Atomic Energy Agency’s director Rafael Grossi echoed these concerns, urging “maximum military restraint in order to maintain nuclear safety and avoid an accident with serious radiological consequences.” On a rare positive note, Ukraine’s Zaporizhzhya nuclear plant, under Russian control, regained access to backup grid electricity for the first time in six months.
Russia’s November 8 barrage included over 450 drones and 45 missiles, according to Ukrainian officials. The Defense Ministry in Moscow claimed it targeted weapons production and energy facilities. In Dnipro, a Russian drone strike killed at least three people in a residential building, leading to a two-day period of mourning. Kharkiv’s subway and tram systems ground to a halt as power and water were cut off.
Ukraine has responded in kind, launching near-nightly drone attacks on Russian energy facilities. These strikes have significantly reduced Russia’s ability to produce gasoline and other refined products. In Russian border regions such as Belgorod, more than 20,000 people lost power on November 9, and unconfirmed reports suggest a municipal heating plant in Voronezh was also hit.
The tit-for-tat escalation has prompted Kyiv to plead for U.S. long-range Tomahawk missiles to strike deeper into Russia, but President Donald Trump has repeatedly rebuffed these requests. Russian President Vladimir Putin has warned that such a move would constitute “a completely new stage of escalation” in U.S.-Russia relations.
As the energy conflict rages, the broader market is in turmoil. OPEC+ has increased production, with oil prices hovering at $66 per barrel, but the ongoing disruption threatens to tip the delicate balance. Ukraine’s drone campaign has idled 14 Russian refineries since August, reducing exports by 13% month-on-month. The EU is scrambling to fill the gap, accelerating LNG imports from the U.S. (up 55% year-over-year) and Qatar, whose North Field expansion will add 31 million tons annually by 2027.
Yet, as Europe’s strategic dilemma deepens—balancing U.S. pressure against its own energy security—the true cost of this energy war is being paid by ordinary citizens. From Berlin’s factories idling amid soaring diesel prices to Ukrainian families huddled in the dark, the battle for energy supremacy is exposing vulnerabilities on all sides. The outcome remains uncertain, but the stakes could hardly be higher as winter closes in.
