Lukoil and Rosneft Sanctions Underscored the Need for Agility in the Face of Unpredictability

As the year came to a close, the Kharon Brief asked a range of industry leaders to assess 2025’s biggest storylines and what’s coming in 2026 in sanctions, risk and compliance.

Claire O’Neill McCleskey is co-founder of Clarity Compliance Consulting and former head of the Compliance Division at the U.S. Treasury Department’s Office of Foreign Assets Control.

The U.S. sanctions against Lukoil and Rosneft in October 2025 may not be the biggest sanctions OFAC has imposed in response to Russia’s attack on Ukraine, or even the biggest this year. But the designation of Lukoil, Russia’s second-largest oil producer, exemplifies the way the second Trump administration uses sanctions and the challenges U.S. and multinational businesses will continue to face in implementing U.S. sanctions in 2026.

• Unpredictability: After nine months with no new U.S. sanctions on Russia, the October OFAC sanctions against Lukoil and Rosneft, Russia’s two remaining unsanctioned oil majors, caught many by surprise. Similarly, few anticipated the U.S. Treasury Department would later use X.com to publicly express its opposition to commodities trader Gunvor’s proposed purchase of Lukoil’s non-Russian assets, the fallout of which led to the exit of Gunvor’s CEO and co-founder.
• Divergence among sanctions regimes: Differences in sanctions regimes have caused compliance headaches and conflict-of-law issues for years, but the Lukoil sanctions exemplify how the devil is often in the details on sanctions alignment. The United States, United Kingdom and European Union have all imposed some form of sanctions related to Lukoil, but the prohibitions and associated general licenses differ in each jurisdiction. On October 15, the United Kingdom imposed an asset freeze and other restrictions on Lukoil, followed a week later by OFAC’s sanctions on Lukoil. The day after OFAC’s action, the European Union, which is home to many Lukoil-owned refineries and retail fuel stations, sanctioned only Lukoil’s Dubai-based trading subsidiary. For multinational companies, navigating these sanctions means understanding exactly where and how they are exposed to Lukoil, whether transactions may be authorized by relevant licenses, and whether there are meaningful differences between what is authorized or prohibited by different jurisdictions.
• Complicated compliance: Given the scale of Lukoil’s upstream and downstream assets both inside and outside Russia, assessing exposure to Lukoil and its many subsidiaries is far from simple. Since the imposition of the price cap on Russian oil in 2022 (a multilateral sanctions regime that has subsequently diverged), new traders, ship managers and shipowners have used a web of shell companies and “shadow fleet” vessels to disguise their movement of Russian oil. Companies that provide services to vessels moving Russian oil must implement controls to avoid unauthorized transactions involving sanctioned Russian oil majors, which is no easy feat given the involvement of intermediaries and the difficulty of validating or even obtaining beneficial ownership information in many jurisdictions.

Looking ahead to 2026: Companies should maintain flexible sanctions compliance programs that can adapt to sudden shifts in sanctions policies and the associated impact on business lines, supply chains and counterparties. 

This is a tough ask of compliance departments in a time of tightening budgets and uncertain economic outlook in many markets. However, given that the U.S. statute of limitations for civil and criminal sanctions violations now stretches to 10 years, investing in an agile sanctions compliance program remains critical, regardless of whatever unexpected sanctions developments occur in 2026.