Crude Awakening: United States Sanctions Rosneft and Lukoil

On October 22, 2025, the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) designated OJSC Rosneft and Lukoil OAO on the Specially Designated Nationals and Blocked Persons List (the SDN List). OFAC also designated 34 subsidiaries of Rosneft and Lukoil. All targeted entities were designated pursuant to Executive Order 14024 for operating or having operated in the Russian energy sector.

US Person Prohibitions

As a result of the designations, US persons (for these purposes, US citizens and permanent residents, entities organized under US law, and natural persons while physically present in the United States) are prohibited from engaging in virtually any transaction with or for the benefit of Rosneft or Lukoil, as well as any subsidiary that is ultimately owned 50% or more by Rosneft or Lukoil (regardless of whether such subsidiary was separately designated to the SDN List or not) or another specially designated national. All property and interests in property of Rosneft, Lukoil, and their 50%-or-more-owned subsidiaries that are or come within the possession or control of US persons must be blocked (i.e., frozen).

Sanctions Risk for Non-US Entities

Pursuant to Executive Order 14024, OFAC may also designate any person that is deemed to have “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of” any of the newly sanctioned entities. Consequently, non-US entities that engage in transactions with or for the benefit of Rosneft or Lukoil may risk becoming sanctioned themselves. Further, US and other financial institutions and corporations may be reluctant to transact with entities that engage in business with Rosneft or Lukoil or their subsidiaries.

General Licenses

Concurrently with the new sanctions designations, OFAC issued general licenses (GL) authorizing certain transactions that would otherwise be prohibited. These include:

• GL 124A: Authorizing otherwise-prohibited transactions related to the Caspian Pipeline Consortium or Tengizchevroil projects.
• GL 126: Authorizing transactions “ordinarily incident and necessary to the wind down” of any transactions involving Rosneft, Lukoil, or their 50%-or-more-owned subsidiaries, until November 21, 2025.
• GL 127: Authorizing transactions “ordinarily incident and necessary to the divestment or transfer, or the facilitation” thereof “of debt or equity issued or guaranteed” by Rosneft, Lukoil, or their 50%-or-more-owned subsidiaries, until November 21, 2025.
• GL 128: Authorizing transactions involving Lukoil retail service stations located outside the Russian Federation, until November 21, 2025.

Perhaps most importantly, entities engaged in business with Rosneft, Lukoil, or their 50%-or-more-owned subsidiaries have until November 21, 2025, to wind down these transactions, subject to the terms of GLs 126 and 127, without risking sanctions violations or designations.