Gunvor, a global commodity trading company, has pulled its offer to purchase Lukoil's international assets after the U.S. Treasury Department indicated it would block the deal. The Treasury described Gunvor as a "Kremlin puppet," leading to the sudden end of a significant asset sale linked to Western sanctions on Russia.

The Treasury issued a public statement saying, "President Trump has made it clear that the war must stop immediately. As long as Putin continues the senseless killings, Gunvor, which is tied to the Kremlin, will not receive a license to operate and benefit."

In response, Gunvor quickly criticized the Treasury's statement as "fundamentally misinformed and false." The company emphasized that it has always been transparent about its ownership and business practices, actively distancing itself from Russia, halting trade in line with sanctions, selling off Russian assets, and publicly opposing the war in Ukraine for over a decade.

The company confirmed its withdrawal from the acquisition, stating, "We appreciate the chance to clarify this misunderstanding. Therefore, Gunvor is retracting its proposal for Lukoil's international assets."

Lukoil, which is Russia's second-largest oil company, had accepted Gunvor's bid to buy Lukoil International GmbH, the part of the company that manages its foreign assets, after new U.S. sanctions were imposed in late October. This deal would have been a major action by a Russian company resulting from Western sanctions related to the war in Ukraine.

The transaction required approval from the Treasury's Office of Foreign Assets Control, and there was a current license allowing transactions with Lukoil and another sanctioned company, Rosneft, until November 21.

Gunvor gained prominence in the 2000s as the biggest trader of Russian oil. At that time, its shareholders included Gennady Timchenko, who is a close associate of President Vladimir Putin.

However, Timchenko sold his share in Gunvor after being sanctioned by the U.S. following Russia's annexation of Crimea in 2014. Gunvor has since claimed that it has distanced itself from Russian business operations for over a decade.

The failed deal would have involved significant energy infrastructure across several continents. Lukoil's international portfolio includes the West Qurna 2 oil field in Iraq, one of the largest globally, where Lukoil holds a 75% stake and production exceeds 480,000 barrels per day.

The deal also included the Lukoil Neftohim Burgas refinery in Bulgaria, the largest in the Balkans with a capacity of 190,000 barrels per day, and the Petrotel refinery in Romania. Lukoil's foreign operations span oil terminals, retail fuel networks in Europe, and various projects in Central Asia, Africa, and Latin America.

Based in Moscow, Lukoil produces about 2% of the world's oil.

The collapse of this deal leaves Lukoil in search of other options as the November 21 deadline approaches, and the company has previously suggested it might seek an extension of its current license if needed.