Overview
On October 22, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Russia’s two largest oil companies, Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil), along with dozens of subsidiaries and affiliates, to OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List) pursuant to Executive Order 14024. The action targets entities across Russia’s energy sector, including upstream, midstream, and downstream operations. OFAC also issued four general licenses authorizing certain transactions involving the newly designated entities, including wind-down activities, retail operations outside Russia, and dealings with specific financial instruments. This marks the first time the United States has imposed sanctions on Russia since the start of the second Trump administration, despite regular threats from President Trump.
According to Treasury Secretary Scott Bessent, the sanctions were imposed because of “President Putin’s refusal to end this senseless war.” He also noted, “Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war.”
Rosneft and Lukoil had previously been left off the SDN List, even after the third- and fourth-largest Russian oil companies—Gazprom Neft and Surgutneftegas—were designated by President Biden in January 2025. With this latest action, all of Russia’s largest oil companies are now subject to blocking sanctions. As with all SDNs, the sanctions apply to any entity owned 50 percent or more, directly or indirectly, by Rosneft or Lukoil (or any other SDN), even if the entity is not specifically included on the SDN List. Many of the subsidiaries and affiliates specifically designated by OFAC would likely have been blocked regardless under OFAC’s 50 percent rule. But the specific designations will serve to put the public on notice that OFAC views those entities as blocked.
As of the time of this alert, certain outlets are reporting that Treasury is considering a temporary exemption of certain European Rosneft subsidiaries, specifically Rosneft Deutschland, in response to concerns raised by German authorities. The scope of the announced sanctions would otherwise impact Rosneft Deutschland, which remains majority owned by its Russian parent notwithstanding Germany’s trusteeship imposed on the company. The scope and length of any such license remain unpublished for the moment.
Key General Licenses Issued
In conjunction with the designations, OFAC issued four general licenses to provide limited authorization for certain otherwise prohibited transactions involving Rosneft, Lukoil, and their affiliates. The general licenses include:
- General License 124A – Authorizing Petroleum Services and Other Transactions Related to the Caspian Pipeline Consortium and Tengizchevroil Projects
- General License 126 – Authorizing the Wind Down of Transactions Involving Rosneft or Lukoil
- General License 127 – Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Rosneft or Lukoil
- General License 128 – Authorizing Certain Transactions Involving Lukoil Retail Service Stations Located Outside of Russia
While General License 124A does not include an expiration date, the other three licenses are set to expire at 12:01 a.m. EST on November 21, 2025.
Impact
The designation of Rosneft and Lukoil, along with their subsidiaries and affiliates, will have immediate implications for companies with connections to the Russian energy sector. Businesses should undertake a thorough review to identify any exposure to the recently designated entities and other entities blocked under the 50 percent rule.
Based on comments from Secretary Bessent, businesses should prepare for possible additional restrictions targeting Russia. OFAC’s press release announcing the sanctions also warned non-US persons, including non-US financial institutions, of secondary sanctions risks for dealings with the sanctioned entities.
For additional information regarding this development or Russia sanctions generally, please contact a member of Steptoe’s Economic Sanctions team.
