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Iraq Halts Lukoil’s West-Qurna-2 Exports as U.S. Sanctions Block Asset Sale

The company faces a Nov. 21 deadline to divest foreign subsidiaries or risk losing them.

Overview

  • Lukoil said Iraqi authorities froze payments and stopped loadings from the West-Qurna-2 field, which produces about 480,000 barrels per day, roughly 9% of Iraq’s output.
  • The U.S. Treasury blocked a planned sale of Lukoil assets to trader Gunvor, calling the firm a Kremlin proxy, and Gunvor withdrew its offer.
  • Lukoil declared force majeure to shield itself from contract penalties and, according to Reuters reports, moved to cut non-Russian foreign staff as operations were disrupted.
  • Financial Times reporting puts Lukoil’s overseas exposure at about $14 billion, and the company has been told to sell foreign units by Nov. 21 or risk forfeiture.
  • Host-country and counterparty responses are spreading, with Bulgaria voting to place the Burgas refinery under state control and banks tightening dealings, including impacts on Lukoil’s Teboil unit in Finland.