Lukoil's Value Collapses By $10 Billion After US Sanctions
- 12.11.2025, 22:37
"Lukoil" became the leader in decline among "blue chips" on the stock exchange.
Lukoil shares continue to rapidly depreciate on the Moscow Exchange for the fourth week in a row amid U.S. sanctions and the scrapping of a deal to sell the company's foreign assets, reports The Moscow Times.
In trading on Wednesday, Lukoil's papers were falling to 4,900 rubles apiece, the lowest in two and a half years. The company's quotes collapsed by 4.6% during the day, 7.4% since the beginning of the week, and 18.6% since October 23, when sanctions were imposed. As a result, the market capitalization of Russia's largest private oil company fell by 777 billion rubles, or $9.6 billion.
Lukoil has become the leader in the decline among the "blue chips" on the stock exchange: investors fear that because of the sanctions it will not be able to withdraw from foreign assets without significant losses, says leading analyst Freedom Finance Natalya Milchakova.
Lukoil, which operates in 11 countries, from Western Europe to Latin America, has faced almost complete paralysis in foreign markets. In Iraq, it can receive neither money nor oil for production at the West Qurna-2 field; in Finland, the company's Teboil gas station network is without fuel; and Lukoil's trading unit, the Swiss Litasco, cannot charter tankers or make payments. Indian and Chinese refineries are refusing Lukoil's oil.
An attempt to sell these assets to Switzerland's Gunvor was blocked by the US Treasury Department. And now Lukoil is preparing for the fact that all foreign assets worth $16 billion will be simply lost, a source familiar with the situation told the Financial Times.
"Because of the sanctions, LUKOIL's assets may even be confiscated by the governments of the countries that have joined the US sanctions, just as Germany actually confiscated Rosneft's assets on its territory," Milchakova points out.
As a result, Lukoil may lose 15-17% of all hydrocarbon production: it produces 6.5% of oil and almost half of gas abroad, according to analysts at Alfa Bank. Foreign refineries, which supply a network of 5,000 gas stations, provide Lukoil with a quarter of the total volume of oil refining. The loss of foreign assets "could have a significant impact on Lukoil's financial performance," Alfa Bank warned.
Politico's source, a former top Lukoil executive, estimated that the loss of foreign assets would deprive the company of a third of its revenue. Last year it reached a record 8.4 trillion rubles, more than 1 trillion of which Lukoil paid out to shareholders.
The license issued by the U.S. Treasury Department to complete transactions with Lukoil expires on November 21. By this date, the company must get rid of foreign assets. However, it is unrealistic to sell everything within such a period, says Dmitry Kasatkin, managing partner of Kasatkin Consulting: the usual term for such assets is 6-12 months.
If the implementation of sanctions will be tightly controlled by the U.S. administration, Lukoil will probably have to be rescued by the state, does not exclude Tatiana Mitrova, a researcher at the Center for Global Energy Policy at Columbia University. According to Mitrova, Lukoil may be absorbed by Rosneft so that they "can cope with difficulties together."