Additionally, in accordance with the announcement and guidelines of the US Treasury, all entities in which Lukoil has a direct or indirect interest of 50% or more, or in which subsidiaries of Lukoil included in the SDN list have such an interest, are covered by sanctions, even if they are not on the SDN list.
Based on Executive Order 14024 (EO 14024), OFAC included Lukoil on the SDN list as an entity that performs energy activities and thereby contributes to the economy of the Russian Federation. The reason for expanding the SDN list, according to OFAC, is to put pressure on Russia’s energy sector and reduce the Kremlin’s ability to raise revenue for its war machine and prop up its weakened economy.
Pursuant to EO 12024, all property and legal interest in the property of Lukoil and its subsidiaries that are located in the US or will be located in the US or are in the possession or control of US persons (or will be found in the possession or control of such persons) are blocked by the US.
OFAC also issued general license number 126, which enabled the completion of already agreed transactions, whereby the payments to Lukoil can be made no later than November 21, 2025, and to a special blocked bank account located in the USA.
These sanctions currently do not have a direct impact on Lukoil Serbia, bearing in mind that the Republic of Serbia, in accordance with the signed international agreements with the USA, has no obligation to directly apply any sanctions introduced by the authorities of the USA against any natural or legal person. However, business with Lukoil Serbia by other companies and financial institutions puts these companies/financial institutions at risk of being subject to sanctions. In 2024, according to the number of retail outlets on the market of the Republic of Serbia, Lukoil Serbia ranks second with 7.27% of the total number of stations, while NIS, which is also under US sanctions, is in first place with 21.09%.
This analysis is provided by Senior Partner Jelena Gazivoda, Partner Nikola Đorđević and Senior Associate Marko Mrđa from JPM Belgrade office.
