Oil drilling derricks at desert oilfield. The change in oil prices caused by the war. Oil prices are rising.
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On October 22, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced the immediate imposition of full blocking sanctions pursuant to Executive Order (“E.O.”) 14024 against Russian oil companies PJSC Lukoil Oil Company (“Lukoil”) and PJSC Rosneft Oil Company (“Rosneft”), along with over two dozen of their subsidiaries, for operating or having operated in Russia’s energy sector.

Each of Lukoil and Rosneft were already subject to Directive-based sectoral sanctions under Executive Order 13662, but those sectoral sanctions were more limited in nature. OFAC stated the decision to upgrade their sanctions designations to comprehensive blocking sanctions was the result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine. OFAC explained that these designations are intended to increase pressure on Russia’s energy sector.

Sanctions Prohibitions

As a result of these entities’ designations as Specially Designated Nationals (“SDNs”), U.S. persons are generally prohibited from engaging in any transactions with Lukoil, Rosneft, and their designated subsidiaries. Additionally, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. . This includes prohibitions on the provision of goods, services, or technology, as well as financial dealings such as debt or equity transactions.

Importantly, these sanctions also trigger secondary sanctions risk for non-U.S. persons and foreign financial institutions who provide “material assistance” or conduct or facilitate certain “significant transactions” for persons and entities designated pursuant to E.O. 14024. OFAC has authority to designate as SDNs any non-U.S. persons and foreign financial institutions who participate in these types of transactions with or for Lukoil, Rosneft, and their sanctioned subsidiaries.

General Licenses

OFAC issued the following Russia-related General Licenses (“GLs”) to mitigate any initial disruption brought by these designations. GLs 126, 127, and 128 authorize the specific transactions therein through 12:01 a.m. EST on November 21, 2025:

GL 124A replaces previously issued Russia-related General License 124, which authorized certain petroleum services related to the Caspian Pipeline Consortium or Tengizchevroil projects. GL 124A now authorizes certain related transactions when they involve Lukoil, Rosneft, or the majority-owned subsidiaries.

GL 126 authorizes all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of any transaction involving Lukoil, Rosneft, and any company owned 50% or more by Lukoil or Rosneft, directly or indirectly, individually or in the aggregate through 12:01 a.m. eastern standard time, November 21, 2025, provided that the payments made to a blocked account are made in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (“RuHSR”). GL 126 does not authorize any transactions prohibited by Directive 2 under E.O. 14024, Directive 4 under E.O. 14024 or any transactions otherwise prohibited by RuHSR involving any person blocked pursuant to RuHSR.

GL 127 permits the divestment and transfer of debt or equity issued by Lukoil, Rosneft, and their majority-owned entities, as well as the wind down of derivative contracts involving these entities through 12:01 a.m. eastern standard time, November 21, 2025. GL 127 does not authorize any transactions prohibited by Directive 2 under E.O. 14024, Directive 4 under E.O. 14024 or any transactions otherwise prohibited by RuHSR involving any person blocked pursuant to RuHSR.

GL 128 specifically authorizes transactions involving the purchase of goods and services from, or the maintenance, operation, or wind down of Lukoil retail service stations located outside of Russia through 12:01 a.m. eastern standard time, November 21, 2025. GL 128 does not authorize any transactions prohibited by Directive 2 under E.O. 14024, Directive 4 under E.O. 14024 or any transactions otherwise prohibited by RuHSR involving any person blocked pursuant to RuHSR. GL 128 defines the term “Lukoil Retail Service Station” to mean “physical retail service stations located outside the Russian Federation and in existence on or before October 22, 2025 in which (1) Public Joint-Stock Company Oil Company Lukoil (“Lukoil”) has an interest, or (2) any entity in which Lukoil owns, directly or indirectly, a 50 percent or greater interest, has an interest.”

Implications for U.S. and Foreign Businesses

The Directive-based sectoral sanctions which previously applied to both Lukoil and Rosneft prohibited U.S. persons from engaging in certain transactions involving new debt and the exploration or production for new deepwater, Arctic offshore, or shale projects in Russia. These sanctions significantly increase both the scope of prohibited transactions for U.S. companies and the secondary sanctions risks for non-U.S. companies and foreign financial institutions engaged in transactions involving these entities and Russia’s energy sector.

OFAC’s press release is available here, and the full set of General Licenses can be accessed here.

Husch Blackwell’s Export Controls and Economic Sanctions Team continues to closely monitor all international trade and export controls developments. Should you have any questions or concerns, please contact Cortney Morgan, Grant Leach, Emily Mikes, or Eric Dama of our Export Controls and Economic Sanctions Team.