In a significant move reshaping the European energy landscape, the US Treasury Department has granted limited authorizations to facilitate the potential sale of Russian oil giant Lukoil’s foreign assets, while explicitly allowing continued transactions with its key Burgas refinery in Bulgaria. The decision, announced on November 16, 2025, comes amid tightening sanctions against Russia’s two largest oil companies—Lukoil and Rosneft—over their roles in financing Moscow’s nearly four-year war in Ukraine, according to Reuters and statements from both US and Bulgarian officials.
The newly issued licenses provide a crucial window for potential buyers—including previous suitors like Shell, private equity firm Carlyle, and Kazakhstan’s KazMunayGas—to engage in talks with Lukoil until December 13, 2025, about acquiring its overseas holdings. However, as outlined by the Treasury Department and reported by multiple outlets, any final sale will only be approved if the transaction severs all ties with Lukoil and ensures that proceeds are placed in an escrow account inaccessible to the Russian company for the duration of the sanctions.
“These authorizations support the energy security of our partners and allies without benefiting the Russian government,” a Treasury spokesperson stated, emphasizing the delicate balance Western powers are trying to strike between keeping critical energy supplies flowing and preventing sanctioned entities from profiting. The authorizations follow the October 2025 sanctions, which have already caused significant disruption to Lukoil’s overseas operations—representing about 0.5% of global oil output—and have sent ripples through international oil markets.
One focal point of the new measures is Bulgaria, where the government has moved decisively to seize operational control of the Lukoil Burgas refinery, the only oil refinery in the country. This step, confirmed by Prime Minister Rosen Zhelyazkov, aims to guarantee fuel supplies through the winter and prevent any funds from flowing to sanctioned Russian entities. “Bulgaria has struck a deal with the US to comply with sanctions on Russian oil, ensuring the Lukoil Burgas refinery and related assets do not finance Russia’s war in Ukraine,” Zhelyazkov said, as reported by Bulgarian and international media.
The Treasury specifically authorized transactions involving Lukoil entities in Bulgaria to continue through April 29, 2026—a move that dovetails with the Bulgarian government’s efforts to stabilize its energy sector and maintain supplies. The Bulgarian Energy Ministry welcomed the US decision, noting, “This US move is a direct result of the intensive actions, negotiations, and diplomatic talks we have been conducting since day one to ensure stability, predictability, and peace of mind for Bulgarian citizens and businesses.”
Britain’s Office of Financial Sanctions Implementation has also granted licenses for Lukoil Bulgaria EOOD and Lukoil Neftochim Burgas AD, the latter managing the strategic Burgas refinery. This coordinated international approach reflects a broader effort to insulate key European energy infrastructure from the destabilizing effects of sanctions—while still keeping pressure on Moscow.
The challenge, however, is not limited to oil. Bulgaria’s Energy Minister Zhecho Stankov announced a major expansion of the country’s gas transit capacity, including a new pipeline that will allow liquefied natural gas (LNG) from Greece and the US to reach Ukraine, Moldova, and Central Europe. This move is expected to reduce the region’s reliance on Russian gas—a longstanding vulnerability that has taken on new urgency since the war in Ukraine began. Stankov’s announcement highlights Bulgaria’s ambition to position itself as a regional energy hub, a strategy that has drawn both praise and debate within Parliament and across the EU.
“Parliament’s emergency law and the state takeover have drawn debate, but the move positions Bulgaria as a regional energy hub in Europe’s shifting strategy to balance energy security with sanctions enforcement,” analysts noted. The arrangement, which grants Bulgaria and other EU states temporary sanction exemptions, is subject to US and UK review every six months, underscoring the provisional and closely monitored nature of the deal.
Meanwhile, the US Treasury has also issued a separate license to safeguard the flow of crude oil via the Caspian Pipeline Consortium (CPC) and the Tengizchevroil project, even when sanctioned Russian firms are involved. The CPC pipeline is a linchpin of global energy infrastructure, transporting around 1.6 million barrels per day—about 1.5% of global oil supply—from Kazakhstan’s major oil fields through Russian territory to international markets. Western officials are keen to shield this pipeline from potential disruption or retaliation, given its importance to both European and global energy security.
The intricacies of these arrangements have not gone unnoticed by private sector players. According to Reuters, US private equity firm Carlyle is actively exploring options to buy Lukoil’s foreign assets, with sources familiar with the matter confirming that Carlyle was seeking a US license before beginning due diligence. The interest from major firms like Carlyle and Shell underscores the high stakes and complex geopolitics at play in the scramble for Lukoil’s overseas holdings.
For Bulgaria, the stakes are especially high. The country’s reliance on the Burgas refinery for domestic fuel supplies means that any disruption could have immediate and painful consequences for businesses and citizens alike. The government’s bold intervention—seizing operational control and working closely with US and UK partners—reflects both the urgency of the situation and the broader European effort to chart a new path away from Russian energy dependence.
Yet, not everyone is convinced. The emergency law passed by Bulgaria’s Parliament and the state’s assertive takeover of the refinery have sparked debate over sovereignty, market stability, and the long-term implications for Bulgaria’s energy sector. Some lawmakers and industry voices worry that state intervention could deter investment or set a precedent for further government takeovers, while others argue that extraordinary times demand extraordinary measures to protect national and regional security.
On the international stage, the moves by the US, UK, and Bulgaria are being closely watched as a test case for how Western allies can coordinate sanctions enforcement without triggering energy shortages or market chaos. The delicate dance—granting temporary exemptions, closely monitoring compliance, and supporting strategic infrastructure—may become a blueprint for future sanctions regimes as the world grapples with the fallout of protracted geopolitical conflicts.
As the December 13 deadline for talks with Lukoil approaches, and with the Burgas refinery authorized to operate through April 2026, all eyes are on the next steps. Will a buyer step forward to acquire Lukoil’s assets under the strict terms set by Washington? Can Bulgaria maintain energy stability while navigating the treacherous waters of sanctions and regional politics? The coming months will reveal whether this balancing act can hold—or whether new shocks await in Europe’s energy markets.
For now, Bulgaria’s bold maneuvering and the coordinated response from Western allies offer a glimpse of how energy security and sanctions enforcement can, at least temporarily, coexist in an increasingly fragmented world.
