- within Consumer Protection, Insolvency/Bankruptcy/Re-Structuring and Insurance topic(s)
On October 22, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") imposed blocking sanctions on two of Russia's largest oil companies—Open Joint Stock Company Rosneft Oil Company ("Rosneft") and Lukoil OAO ("Lukoil")—and several of their subsidiaries. In this alert, we provide an overview of these measures and key takeaways.
New blocking sanctions
OFAC added Rosneft and Lukoil, along with several of their subsidiaries, to its Specially Designated Nationals and Blocked Persons List (the "SDN List", and persons appearing thereon, "SDNs") pursuant to Executive Order 14024 ("EO 14024"). OFAC stated the designations result from "Russia's lack of serious commitment to a peace process to end the war in Ukraine." The designations come shortly after the White House announced that U.S. President Donald Trump would no longer hold a second meeting with Russian President Vladimir Putin to discuss the war in Ukraine.
As a result of these designations, all property and interests in property of Rosneft, Lukoil, and the other designated entities that are in the U.S. or the possession or control of U.S. persons are blocked and must be reported to OFAC. Pursuant to OFAC's 50% Rule, any entities owned individually or in the aggregate, directly or indirectly, 50% or more by one or more of the designated entities are now also targeted with blocking sanctions (such entities, "Blocked Persons").
All U.S.-nexus transactions or dealings with or for the benefit of these SDNs, Blocked Persons, and/or their respective property or interests in property, are prohibited absent authorization from OFAC. Non-U.S. persons face the risk of being targeted with blocking sanctions under EO 14024 for providing "financial, material, or technological support" for, or goods or services to, such persons. In addition, foreign financial institutions that engage in certain transactions involving the newly designated entities face the risk of secondary sanctions.
Related general licenses
OFAC issued four general licenses in connection with the designations, which temporarily authorize certain activities. These general licenses include:
- Russia-related General License 124A, which authorizes certain transactions related to the Caspian Pipeline Consortium or Tengizchevroil projects
- Russia-related General License 126, which authorizes transactions ordinarily incident and necessary to the wind down of any transaction involving the newly designated entities, through 12:01am EST on November 21, 2025
- Russia-related General License 127, which authorizes certain transactions ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by the newly designated entities, through 12:01am EST on November 21, 2025
- Russia-related General License 128, which authorizes certain transactions involving Lukoil retail service stations located outside of Russia, through 12:01am EST on November 21, 2025.
In the United States, there are over 200 Lukoil retail service stations located in New York, New Jersey, and Pennsylvania.
Key takeaways
These new designations reflect a new stage in the Trump administration's efforts to end the Ukraine war, and they create substantial challenges for parties that have ongoing direct or indirect dealings with any of the designated parties or their affiliates.
It is critical to carefully evaluate any connections with these newly-designated parties, assess related primary and secondary U.S. sanctions risk (as well as risk under non-U.S. sanctions), and if seeking to exit ongoing relationships or transactions with designated parties, to do so in strict compliance with the relevant General Licenses OFAC also just issued. Affected parties should also keep in mind that any persons on the SDN list pursuant to EO 14024 may also be subject to export restrictions administered by the Department of Commerce, Bureau of Industry and Security (BIS).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
