Iraq
Iraqi Prime Minister Mohammed Shia’ al-Sudani (left) receives Vagit Alekperov, the founder of Russian oil giant Lukoil in Baghdad on November 17, 2025. Photo: Sudani’s office
ERBIL, Kurdistan Region - The US Treasury Department said Tuesday it has imposed some of its “most impactful” sanctions on Russia’s largest oil companies, Lukoil and Rosneft. The move comes as Iraq struggles to find a “solution” to the fallout from the US sanctions and their impact on the country's oil production.
In a statement on X, the Treasury said that US President Donald Trump “has targeted Russia’s two largest oil companies [Lukoil and Rosneft] in one of the most impactful Treasury actions to date.” The department added that “Russian oil is now selling at multi-year lows” and noted its preparedness “to take further action if necessary,” attributing the measures to Russia’s military action against Ukraine.
In October, the US President had imposed sanctions on Russia’s Rosneft and Lukoil, citing Moscow’s “lack of a serious commitment” to end the Russia-Ukraine war. However, the US Treasury’s Office of Foreign Assets Control (OFAC) on Friday issued limited licenses permitting some Lukoil operations abroad.
In Iraq, Prime Minister Mohammed Shia’ al-Sudani on Monday met with Lukoil founder Vagit Alekperov to discuss a “solution” to the fallout from the US sanctions on the company and their impact on Iraq’s oil production.
According to a statement from the Iraqi premier’s office, Sudani and Alekperov “discussed solutions and mechanisms to ensure stable oil production following the measures taken by the US Treasury against the company, which have affected the implementation of its investment contracts.”
Reuters reported on Monday that Lukoil declared force majeure at its West Qurna-2 oil field, located about 65 kilometers northwest of Iraq’s southern Basra province. The site is considered one of the company’s most valuable foreign assets, as Lukoil currently produces around 480,000 barrels per day (bpd) from the field.
The news agency further reported that Iraqi energy officials are considering seeking a six-month sanctions waiver from the US Treasury to allow Lukoil to continue operating.
Sudani and Alekperov also discussed “the stability of global oil supply markets and the importance of avoiding any impact on Iraq’s ability to contribute to oil production.”
The Iraqi premier affirmed his country’s “keenness to maintain stability in global oil markets in a manner that safeguards the interests of both producers and consumers, while ensuring that Iraqi oil production continues at stable and approved levels.”
Earlier this month, Russia’s ambassador to Iraq, Elbrus Kutrashev, told Rudaw that Russian energy firms - including Lukoil, Gazprom, and Rosneft - remain active in both Iraq and the Kurdistan Region. He dismissed Western sanctions as “illegal” and said they obstruct Russian companies’ work, noting that Lukoil’s investments in Iraq exceed $11 billion.
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