FT: Europe’s Russian energy supply faces full US extraction effort

Torbjörn Törnqvist, the 72-year-old billionaire head of commodities trading house Gunvor, stunned the energy sector last week with an audacious attempt to acquire Lukoil’s $22 billion international portfolio, including oilfields, refineries, and petrol stations.

The move came shortly after Lukoil was hit by US sanctions, and the deal immediately raised questions about whether Gunvor was acting on behalf of the Kremlin.

Speaking at the Adipec energy forum in Abu Dhabi, Törnqvist defended the bid as a move against Moscow, not a favour, promising a “clean break” from Lukoil’s past ownership. “This is not something we are doing with Russia. This is something we’re taking away from Russia. It’s actually the opposite,” he told the Financial Times.

However, the deal faced an immediate obstacle: Washington. The US Treasury explicitly warned on X that “as long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a licence to operate and profit.” In response, Gunvor withdrew its offer, stating that any transaction was fully contingent on US approval and that the company respected Washington’s decision.

The bid and its rapid collapse have sent ripples through Gunvor’s lenders and trading partners. While most banks reaffirmed support, Santander pulled out of a $2.8 billion loan related to Gunvor’s US business. Industry observers warned that the firm’s reputation had been damaged, with Jean-François Lambert, former HSBC head of commodity finance, saying, “If you ask me if Gunvor is now in a mess, they’re in a mess. Trying to do this deal was very naive.”

Gunvor’s relationship with Russia remains under scrutiny. Although Törnqvist acquired full ownership of the company in 2014, buying out former partner Gennady Timchenko, Gunvor has never fully escaped US concerns over Kremlin ties. The Treasury’s November 7 tweet labelling Gunvor a “Kremlin puppet” effectively killed the transaction.

The attempt to acquire Lukoil’s international business arose amid a broader scramble among global energy companies, including Azerbaijan’s Socar, Kazakhstan’s KazMunayGas, and Hungary’s MOL. Lukoil had quietly explored potential buyers since 2023, but faced no urgency until US sanctions were imposed on October 22.

Gunvor’s proposal included no upfront payment; profits would have been held in escrow until sanctions were lifted. Yet with the US government partially shut down, approval delays compounded the challenge.

Following the deal’s collapse, US authorities issued waivers allowing Lukoil operations in Bulgaria and petrol stations to continue temporarily, while negotiations for the international business proceed. Private equity firm Carlyle has emerged as a potential bidder, although due diligence is pending.

Gunvor is now reflecting on its strategy and aiming to sever all Russian ties. Industry sources suggest the firm may need to open ownership to third parties with no Russian connections to rebuild its reputation. Lambert added, “It has to change its style very significantly. And the only way to do that is to open up to third parties who have nothing to do with Russia.”

By Tamilla Hasanova