Gunvor Withdraws Lukoil Offer After U.S. Criticism

Swiss-based trading house Gunvor has officially withdrawn its offer to acquire the international assets of Lukoil, Russia’s largest private oil firm. This decision follows strong condemnation from the U.S. Treasury Department, which stated that the deal would “never” receive approval due to ongoing hostilities in Ukraine.

The U.S. Treasury’s response, delivered via its official account on X, emphasized that as long as Russian President Vladimir Putin continues his aggressive actions, companies perceived as aligned with the Kremlin, like Gunvor, will face barriers to operating in the U.S. market. “President Donald Trump has been clear that the war must end immediately,” the statement read.

Gunvor’s spokesperson, Seth Pietras, responded to the Treasury’s comments, labeling them as “fundamentally misinformed and false.” Following this backlash, Gunvor announced its decision to withdraw its proposal for Lukoil’s international assets.

Details of the Proposed Acquisition

The controversy emerged after Lukoil accepted Gunvor’s offer to purchase its international operations last week. This deal was contingent upon approval from the U.S. Treasury before the firm is formally blacklisted on November 21. Lukoil’s international operations include two refineries located in Bulgaria and Romania, a 45 percent stake in a fuel processing facility in the Netherlands, and approximately 2,000 petrol stations across Europe.

Gunvor was established in 2000 by Swedish billionaire Torbjörn Törnqvist and Gennady Timchenko, a close ally of Putin. At one time, Gunvor was the largest exporter of Russian oil globally. However, in 2014, shortly before the U.S. imposed sanctions on Timchenko following Russia’s annexation of Crimea, he sold his 43.6 percent stake in the company. Since then, Gunvor has worked to distance itself from Russian operations.

Pietras stated, “Gunvor is and has always been open and transparent about its ownership and business.” He emphasized the company’s efforts over the last decade to divest from Russian interests and publicly condemn the war in Ukraine.

Implications for Gunvor and Lukoil

The withdrawal of Gunvor’s acquisition proposal highlights the ongoing complexities of international business dealings involving Russian firms amid the geopolitical climate. Companies navigating these waters face increased scrutiny and potential repercussions from government bodies, particularly in the U.S.

As Lukoil prepares for potential blacklisting, its future operations remain uncertain. The company has expressed that it requires the U.S. Treasury’s approval to move forward with any transactions.

Gunvor’s swift withdrawal indicates a strategic maneuver in response to international pressures and the evolving narrative surrounding business ties with Russia. The trading house now aims to clarify its position and reinforce its commitment to distancing itself from Russian activities in light of the ongoing conflict in Ukraine.