Putin Miscalculated And Sunk Lukoil

A serious blow to the Kremlin's strategy has been dealt.

The sale of Lukoil's foreign assets could be the biggest restructuring of the Russian oil industry in recent years. The reason is the sanctions imposed by the US after the Kremlin refused to negotiate an end to the war against Ukraine.

The other day it became known that Lukoil is looking for buyers for its assets abroad. The volume of assets that could be put up for sale is up to 30% of the company's business. For one of the largest Russian oil corporations, this means a significant reduction in global presence, notes columnist Konstantin Eggert, whose opinion is cited by Euractiv (translation - dialog.ua).

Formally, Lukoil is a private structure. Its key owner is considered to be Russian oligarch Vagit Alekperov. However, in today's Russian economy, major energy corporations are de facto state-controlled and their strategic decisions are coordinated with the Kremlin.

Strike on war financing strategy

The move to sell some foreign assets is linked to U.S. sanctions that come into effect in November. Eggert said the move is a blow to Moscow's strategies based on oil exports as a key source of funding for the war against Ukraine. The Kremlin regime probably expects to transfer the assets to "friendly" companies to covertly maintain control over the flows, but it will be extremely difficult to find such buyers.

Putin's Miscalculations

Eggert emphasizes that the current situation is a consequence of the decisions of Russian dictator Vladimir Putin, who rejected U.S. leader Donald Trump's proposal for a ceasefire in Ukraine as a condition for the U.S.-Russian summit in Budapest.

The Kremlin's stance irritated the White House, and Washington imposed sanctions against Russian oil giants. Now Lukoil and Rosneft face restrictions that cannot be lifted quickly. According to Eggert, Trump will not be able to lift the sanctions without getting noticeable concessions from Moscow, as this would be a blow to his reputation. And such concessions are not to be expected in the current circumstances, the observer believes.

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