Gunvor Withdraws Offer to Buy Lukoil’s Foreign Assets After U.S. Treasury Calls It “Kremlin Puppet”

International oil trading company Gunvor, registered in Cyprus, has announced the withdrawal of its offer to purchase the foreign assets of Russia’s largest private oil and gas company Lukoil. The company made the announcement on Thursday, November 6, via its official account on social media platform X.

Gunvor’s decision came about an hour after the U.S. Department of the Treasury accused the company of having ties to the Kremlin and refused to grant it a license to conduct business until the war in Ukraine ends.

“President (Donald) Trump has made it clear that the war must end immediately. As long as Putin continues his senseless killings, the Kremlin’s puppet, Gunvor, will never receive a license to operate or make profits,” the Treasury said in its post on X.

Gunvor representatives called the Treasury’s statement “fundamentally misleading and false,” stressing that “Gunvor has always been open and transparent about its ownership and business, has actively distanced itself from Russia for more than a decade, ceased trading in line with sanctions, sold off Russian assets, and publicly condemned the war in Ukraine.”

“We welcome the opportunity to correct this clear misunderstanding. At the same time, Gunvor is withdrawing its offer to acquire Lukoil’s foreign assets,” the company added.

Gunvor Was the Main Contender for Lukoil’s Assets

On October 30, Lukoil representatives, already under U.S. and U.K. sanctions, reported that the sale of its foreign business to Gunvor had been agreed upon. The Russian side also committed not to negotiate with other potential buyers.

However, the deal raised suspicions that it could be an attempt to circumvent the sanctions imposed on Lukoil, since Gunvor was founded in 2000 by Russian businessman Gennady Timchenko and Swedish entrepreneur Torbjörn Törnqvist. In 2014, shortly before international sanctions were imposed for the annexation of Crimea, Timchenko sold his stake to his co-founder. Gunvor subsequently sold its Russian assets.

U.S. and U.K. Sanctions in October

On October 22, the U.S. Office of Foreign Assets Control (OFAC) introduced additional sanctions, citing “Russia’s lack of genuine interest in the peace process” to end the war in Ukraine. The new restrictions targeted not only Lukoil and Rosneft, but also 34 of their subsidiaries. The sanctions also apply to any companies in which Lukoil or Rosneft own 50% or more.

Meanwhile, the U.K. imposed its own sanctions on Lukoil in mid-October. However, the U.S. restrictions do not apply to transactions involving the Caspian Pipeline Consortium (CPC) or Tengizchevroil, while the British sanctions also exempt the Karachaganak field in Kazakhstan and Shah Deniz in the Caspian Sea.

Earlier, Lukoil had reportedly stopped crude shipments from Caspian fields to the port of Baku and redirected exports through Makhachkala for further loading at Novorossiysk.