Swiss-based commodities trader Gunvor pulled out of the deal to acquire assets of sanctioned Russian oil major Lukoi, after the US Treasury said in a post on X called Gunvor a “Kremlin puppet”, according to The Bell and Reuters.

As followed by bne IntelliNews, Lukoil, Russia’s second-largest oil producer after Rosneft, announced plans to sell to Gunvor its global downstream assets, including refineries, fuel retail operations and its trading arm.

The US sanctioned both Rosneft and Lukoil, but the deal was reportedly under review by the Office of Foreign Assets Control (OFAC), which must approve any transfer involving sanctioned entities. Gunvor was reportedly  negotiating an extension to its existing license to transact with Lukoil, which expires on November 21. 

However, the Treasury appeared to double down on the sanctions by posting that the President Donald Trump "has been clear that the war must end immediately. As long as [Russian President Vladimir] Putin continues the senseless killings, the Kremlin's puppet, Gunvor, will never get a licence to operate and profit [from Lukoil assets]."

The statements refers to Gunvor's historical ties to Russia and its co-founder and a longtime ally of Vladimir Putin “stoligarch” Gennady Timchenko. Timchenko sold his stake in Gunvor in 2014, after being sanctioned by the US over Russia's invasion of Crimea.

Seth Pietras, Gunvor's corporate affairs director, said in an email to Reuters that Treasury's statement was "fundamentally misinformed and false" and it welcomed "the opportunity to ensure this clear misunderstanding is corrected."

However, Pietras confirmed that "in the meantime, Gunvor withdraws its proposal for Lukoil’s international assets," according to Reuters.

This reinforces a more hardline stance taken by the Trump administration on Kremlin’s continued full-scale military invasion of Ukraine with Rosneft and Lukoil sanctions.

The Bell also notes that the Treasury’s unusually sharp rhetoric signals a possible shift in policy enforcement under President Donald Trump, who recently tightened energy sanctions as part of his pressure campaign on Moscow.

Financial Times and Reuters also previously noted that the Gunvor-Lukoil deal’s structure raised immediate red flags. 

Gunvor, with net assets of $6.6bn as of end-1H25, was reportedly preparing to acquire a portfolio estimated at over $21bn without a clear financing plan. Sources told FT that the transaction was to be financed from future cash flows, with no upfront payment or guaranteed funding. 

There were also concerns about a potential buyback clause that would allow Lukoil to retain operational control, whether formally stated or not, although Gunvor’s CEO pledged that the deal would mark a “clear break” from Russia for the trader.

However, one senior Russian oil executive told FT that Lukoil “would never cede real control” and that only a truly trusted entity would be considered for such a sensitive handover. Competing oil traders also questioned Gunvor’s technical ability to manage such complex downstream assets, as Reuters previously reported.

Gunvor has tried to reassure regulators by pointing to its track record of compliance with Western sanctions. The company exited Russian crude trading after 2022, publicly condemned the invasion of Ukraine, and has grown its US operations, which now account for around 30% of its revenues.

According to FT, Gunvor also proposed using only American banks and legal advisers going forward. Nonetheless, these efforts appear insufficient to offset concerns about the firm’s historical ties to Russia and Timchenko. 

However, the aggressive move by the US Treasury was merely a social media post not backed by any concrete regulation. It could also prove to be part of Trump's escalation-deescalation rollercoaster tactic seen previously in the “tariff wars”, and could be quickly reversed.

The Bell also reminds that in parallel to the US sanctions, other governments are beginning to act unilaterally against Lukoil. Bulgaria is reportedly preparing legislation to nationalise Lukoil’s refinery in Burgas, further complicating any attempt to consolidate Lukoil’s foreign holdings under a single buyer.