On November 14, 2025, a flurry of diplomatic activity, legislative maneuvering, and international business decisions converged on a single issue: the fate of Bulgaria’s only oil refinery, Neftohim Burgas, operated by Russian energy giant Lukoil. The refinery, a vital artery for Bulgaria’s fuel supply, suddenly found itself at the center of a geopolitical storm as the United States and United Kingdom ramped up sanctions against Russia’s energy sector in response to the ongoing war in Ukraine.
According to Reuters and confirmed by the Kyiv UNN agency, the United Kingdom temporarily suspended sanctions against Lukoil’s Bulgarian subsidiaries—Lukoil Bulgaria EOOD and Lukoil Neftochim Burgas AD—by granting a general license. This license, issued by Britain’s Office of Financial Sanctions Implementation, allows these companies to continue business operations and financial transactions until February 14, 2026. The decision was not made lightly; it came after Bulgaria’s government took the extraordinary step of seizing control of Lukoil’s local assets, including the sprawling refinery and a network of 220 gas stations across the country.
“The appointment of a special manager by the Bulgarian government has been the main prerequisite for the U.S. and the UK governments to provide a general license for the operation of the Lukoil-owned entities in Bulgaria,” explained Martin Vladimirov, director of the Energy and Climate Program at the Centre for the Study of Democracy in Sofia, speaking to Reuters.
That special manager, Rumen Spetsov, the head of Bulgaria’s tax agency, was appointed to oversee the refinery and its associated assets. Lawmakers in Sofia had moved quickly, passing legal changes that allowed the state to step in, ensuring continued operation of the refinery and even granting the authority to sell the company if necessary. The sense of urgency was palpable: US sanctions were set to kick in on November 21, raising the specter of a severe winter fuel shortage. As of mid-November, Bulgaria’s state reserves could only cover about 35 days of gasoline and 50 days of diesel, as reported by Assen Asenov, chairman of the state reserves agency, to Bulgaria’s BTA news agency.
Boyko Borissov, head of Bulgaria’s largest ruling coalition party, publicly expressed hope that the US would follow the UK’s lead and provide a similar six-month reprieve. “I hope that today we will get a derogation ... for six months,” Borissov told local media, as quoted by BNR. Bulgaria had already formally appealed to Washington for a sanctions exemption, arguing that the country’s energy security was at stake.
Behind the scenes, the stakes were even higher. The US and UK sanctions, first announced in October 2025, targeted Russia’s two largest oil companies—Lukoil and Rosneft—in a bid to choke off the energy revenues Moscow uses to fund its military campaign in Ukraine. The US Treasury’s Office of Foreign Assets Control made clear that the measures were designed to increase pressure on Russian President Vladimir Putin. In response, Putin downplayed the impact, calling the sanctions “an attempt to pressure and an unfriendly act that does not strengthen Russian-American relations,” as reported by Kyiv UNN.
The ripple effects of these sanctions have been global. Lukoil, feeling the squeeze, declared force majeure at its West Qurna-2 oil field in Iraq due to the US and UK measures, prompting Iraq to suspend all payments to the Russian firm—a move that could halt production at the field. Meanwhile, Lukoil’s Swiss trading arm faced layoffs, and the company began negotiating with several potential buyers for its international assets. US private equity firm Carlyle was reportedly exploring a bid, though an attempt by commodities giant Gunvor to acquire Lukoil’s foreign holdings was blocked by the US government.
In Bulgaria, the government’s decision to seize Lukoil’s assets and appoint a special administrator was seen as a bold but necessary move to avert an energy crisis. “Britain’s waiver coincides with the Bulgarian government appointing a special commercial manager to take control of Lukoil’s Bulgarian assets,” Reuters noted. The legislation enabled the government to oversee the refinery’s operations and, if needed, facilitate its sale to international buyers—several of whom had already expressed interest, according to sources cited by Reuters.
Energy Minister Zhecho Stankov emphasized that the US and UK licenses for Lukoil’s Bulgarian facilities were conditional: payments from these businesses must not reach Russia. This stipulation was designed to ensure that, while Bulgaria could keep its lights on and its vehicles running, Moscow would not benefit financially from the arrangement.
The broader context is one of mounting pressure on Russia’s energy sector and its foreign operations. Since the announcement of sanctions last month, Lukoil’s international business has been in retreat, with assets up for sale and operations disrupted from Bulgaria to Iraq. The company, for its part, stated on Friday that it was in “ongoing negotiations with several potential buyers” about the sale of its international assets, though it declined to provide specifics.
For Bulgaria, the crisis underscored the country’s vulnerability as a small nation heavily reliant on a single refinery for its fuel needs. The government’s swift action—seizing assets, appointing a trusted official, and securing international waivers—was a testament to the high stakes and the complex balancing act between maintaining domestic energy security and supporting Western efforts to pressure Russia over its actions in Ukraine.
As winter approaches, Bulgarians are watching closely. The temporary reprieves from the UK—and, potentially, the US—offer breathing room, but only until February 2026. Lawmakers have made it clear that they are preparing for all contingencies, including further legal changes and the possible appointment of new managers. The hope is that, by then, either the geopolitical winds will have shifted, or Bulgaria will have found alternative sources of fuel to weather whatever comes next.
In the meantime, the Neftohim Burgas refinery continues to operate, its fate tied not just to the fortunes of a Russian oil giant, but to the broader currents of international diplomacy, economic pressure, and the enduring need to keep the country moving—one tank of fuel at a time.
