Lukoil, a major Russian oil company, is selling its international assets to Swiss-based trader Gunvor due to recent US sanctions. The $22 billion acquisition aims to prevent disruptions to Western Europe’s fuel supply and potential job losses. Gunvor’s CEO, Torbjorn Tornqvist, has warned that the deal’s completion is time-sensitive, requiring regulatory permits to avoid market shocks.

The assets in question include refineries in Romania and Bulgaria, with the latter’s Burgas plant supplying over two-thirds of Bulgaria’s fuel. The acquisition has raised concerns among rivals about Gunvor’s ability to afford the purchase, given its equity value of $6.6 billion. A source close to the trader has suggested a structure with no upfront payment, where funds for Lukoil are held in escrow until sanctions are lifted.

This has led to speculation that Gunvor may be acting as a temporary custodian, with a potential buyback clause. However, Tornqvist has denied this possibility, stating that the company has no intention of selling any assets back to Lukoil if sanctions are lifted. The deal’s urgency is compounded by the fact that Gunvor’s license to conduct transactions with Lukoil is set to expire on November 21.

The European energy market has faced significant challenges since reducing Russian fuel imports following the escalation of the Ukraine conflict in 2022. The shift has led to higher industrial costs and debates over EU energy independence. Moscow has accused Western governments of politicizing energy markets, driving Europe towards costly and unreliable alternatives.

The acquisition’s outcome is crucial, as it may impact Western Europe’s fuel supply and job market. The deal’s success depends on Gunvor’s ability to secure regulatory permits and navigate the complex sanctions landscape. As the situation unfolds, the international community will be watching closely to see how the acquisition affects the global energy market and the future of Lukoil’s international operations.