Moscow (AFP) - Russia’s oil giant Lukoil, sanctioned by Washington over the Ukraine war, said Thursday that it would sell its foreign assets to the US investment firm The Carlyle Group.

At the end of October 2025, in order to put pressure on Russia’s state finances, the United States added Moscow’s two largest oil producers, Lukoil and Rosneft, to its blacklist of sanctioned entities.

Companies working with the sanctioned firms risk secondary sanctions that would deny them access to US banks, traders, transporters, and insurers – the backbone of the commodities market.

Lukoil “informs that it signed an agreement with US investment company Carlyle on the sale of Lukoil International GmbH,” Russia’s second-biggest oil producer said, without disclosing the deal’s value.

The deal excluded assets in Kazakhstan and will require US Treasury approval, Lukoil said, adding that it was still negotiating with other investors.

Carlyle, in a statement to AFP, said that the agreement “has been structured to be fully compliant” with US Treasury policies and that it was “conditional upon Carlyle’s due diligence and regulatory approvals”.

The Kremlin declined to comment specifically on the deal but said the interests of the Russian company need to be “ensured and upheld” and called the sanctions “illegal.”

The US had initially given the oil firm one month to sell the holdings before gradually extending it as negotiations dragged on.

Lukoil shares rose 3.5 percent on the news, according to the Moscow stock exchange.

The firm’s vast foreign assets include shares in oil fields and refineries across the globe including in Iraq, Azerbaijan, Egypt, the United Arab Emirates, Nigeria and Mexico.

The Russian economy has been stuttering as the financial burden of the nearly four-year assault on Ukraine and ensuing Western sanctions have pushed up inflation and weighed on growth.

In 2025, Moscow’s oil and gas revenues – which provide roughly a quarter of state budget income and help fund its offensive in Ukraine – fell to a five‑year low.