U.S. and UK defer sanctions on Lukoil in Bulgaria

Payments to and from Lukoil’s subsidiaries in Bulgaria have been temporarily safeguarded after the United Kingdom and the United States announced on Friday a postponement of their sanctions against the Russian oil giant. This gives the Bulgarian government roughly four months to ensure that revenues from these companies do not reach the Russian owners, thereby preventing any funding from supporting Moscow’s war in Ukraine.

The UK’s deferral applies specifically to Lukoil Neftochim Burgas, the country’s largest oil refinery, and Lukoil Bulgaria, which operates the associated chain of fuel stations. It remains in effect until 4 February 2026. Later that day, the US followed suit by issuing a license authorizing transactions involving those two entities, as well as the two additional subsidiaries: Lukoil Aviation Bulgaria, which supplies aviation fuel, and Lukoil Bunkering, a provider of marine fuels. The US exemption extends until 29 April 2026.

Just hours before these announcements, the Bulgarian government revealed that Rumen Spetsov, the current director of the National Revenue Agency, would be appointed as the special administrator for Lukoil’s local operations – a move that had reportedly been coordinated and approved by Western partners. He is expected to be registered in the Commercial Register as early as Monday and to assume his duties immediately. These include replacing the current management of the four companies now under his oversight, managing their day-to-day operations, and even disposing of assets, with his decisions exempt from judicial review.

During the announcement of Spetsov’s appointment, officials repeatedly emphasized that this arrangement would guarantee no revenue from Lukoil’s Bulgarian operations reaches Moscow. Collectively, these four companies generate annual revenues of approximately €7-8 billion. However, questions remain about the oversight of Spetsov himself and whether the government will need to approve his key decisions.

That same morning, Boyko Borissov, leader of the GERB party, told journalists that a U.S. deferral would be in place by the end of the day – a prediction that proved accurate.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 130 related to Russia, titled “Authorizing Transactions Involving Certain Lukoil Entities in Bulgaria,” the ministry announced in a late-evening statement.

Under the UK’s license, payments to or from Lukoil Bulgaria entities are permitted until 14 February 2026, for all existing or new obligations and contracts. The document notes, however, that the UK Treasury may modify, revoke, or suspend the license at any time.

“Today’s decision aims to facilitate a smooth transition of Lukoil Bulgaria’s operations out from under Russian control, while supporting the stability of energy supplies and prices for consumers and businesses,” the British government explained in a statement to media in Sofia.

Officials also praised the ongoing efforts in Bulgaria to determine the future status of Lukoil’s operations. The license could be extended, depending on the evolving circumstances.

In mid-October, UK authorities imposed sanctions on Russia’s largest oil producers, including Lukoil and Rosneft, due to their role in financing Moscow’s invasion of Ukraine.

UK sanctions Russia’s Lukoil and Rosneft, targets shadow fleet

At the end of October, the U.S. followed with sanctions against the two major Russian oil firms, aiming to pressure President Vladimir Putin into negotiations with Ukraine to end the war launched by the Kremlin in 2022.

US sanctions Lukoil and Rosneft as Moscow holds nuclear drills

In October, the UK issued a special license allowing business dealings with two German subsidiaries of the sanctioned Rosneft, as they operate under German state control. The US granted a similar exemption.

On Friday, the U.S. also permitted transactions at Lukoil’s overseas fuel stations until 13 December, fully lifted restrictions on operations tied to the Caspian Pipeline Consortium, and eased limitations related to Tengizchevroil and Karachaganak.

With Sega and Dnevnik.

Caption: Signage at a gas station of Russian multinational energy corporation Lukoil in Moscow, Russia, 27 October 2025. EPA/MAXIM SHIPENKOV