On October 22, 2025, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) placed Russia’s two largest oil companies on its Specially Designated Nationals (SDN) List. This action was taken by the Treasury Department to “increase pressure on Russia’s energy sector and degrade the Kremlin’s ability to raise revenue for its war machine and support its weakened economy.” The companies are:
- Open Joint-Stock Company Rosneft Oil Company, a vertically integrated energy company specializing in exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petroleum products.
- Lukoil OAO, an energy company engaged in the exploration, production, refining, marketing, and distribution of oil and gas in Russia and internationally.
Further identifying information on these sanctioned entities and identified subsidiaries is available here. The additions to the SDN List include numerous subsidiaries of these two companies, but the designation and prohibition of engaging in transactions with these entities includes any entity in which one or more of the SDN Listed companies own, directly or indirectly, individually or in the aggregate, a 50% or greater interest, even if not specifically identified and designated by OFAC.
While being designated and placed on OFAC’s SDN List essentially prohibits all U.S. persons from engaging in transactions with Rosneft and Lukoil, it should still be noted that these entities also remain on OFAC’s Sectoral Sanctions Identification (SSI) List that restricts allowable activities with entities operating in certain sectors of the Russian economy.
In adding Rosneft, Lukoil, and related subsidiaries, OFAC has simultaneously issued several General Licenses related to activities with these designations:
- Russia-related General License 124A, “Authorizing Petroleum Services and Other Transactions Related to the Caspian Pipeline Consortium and Tengizchevroil Projects”;
- Russia-related General License 126, “Authorizing the Wind Down of Transactions Involving Rosneft or Lukoil” through November 21, 2025;
- Russia-related General License 127, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Rosneft or Lukoil” through November 21, 2025; and
- Russia-related General License 128, “Authorizing Certain Transactions Involving Lukoil Retail Service Stations Located Outside of Russia” through November 21, 2025.
Certain other transactions otherwise prohibited by the Russia Harmful Foreign Activities Sanctions regulations remain unauthorized and, therefore, each of these general licenses requires close analysis.
Sanctions Implications
As a result of these actions, all property and interests in property of the entities placed on OFAC’s SDN List above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked entities are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.
In addition, OFAC has indicated that engaging in certain transactions involving these designated entities may risk the imposition of secondary sanctions on any involved foreign financial institutions that conduct or facilitate significant transactions or provide any services to such entities.