Russia's Lukoil overseas companies paralyzed by Western sanctions, Reuters reports

According to sources cited by the outlet, the Iraqi state-owned company SOMO has canceled shipments of three batches of oil produced by Lukoil at the West Qurna-2 field.

The Russian company owns 75% of this project, which has a production capacity of around 480,000 barrels per day, while the remaining share belongs to Iraq’s North Oil Company.

Reuters interlocutors specified that the oil shipments had been scheduled for November 11, 18, and 26.

Traders also told journalists that Litasco — the trading unit of Lukoil in Geneva — has faced difficulties in chartering vessels following sanctions imposed by the UK. British brokers are now refusing to cooperate with the company.

The sanctions have also forced Litasco to lay off some of its employees.

Meanwhile, around a thousand employees and operators of Teboil gas stations in Finland fear imminent layoffs, as local banks have started applying sanctions on Russian oil and the network’s owner, Lukoil.

According to Finance Finland, an organization representing Finnish banks, they have already begun blocking Teboil’s payments ahead of the November 21 deadline.

US sanctions

Earlier, US authorities decided to tighten sanctions against Russia due to the war in Ukraine, imposing restrictions on two Russian oil giants — Rosneft and Lukoil.

The sanctions are expected to take effect on November 20, but they are already effectively harming the Russian economy.

In particular, Indian refineries have announced plans to reduce purchases of Russian oil.

At the same time, recent reports suggest that Lukoil may sell its overseas assets to the Swiss company Gunvor.

For more details on the impact of the new US sanctions on Russia, see the RBC-Ukraine report.