From Rosneft to Lukoil – Putin Is Going All In

There is a striking resemblance between two deals involving strategic Russian oil assets, ten years apart, both initiated by Vladimir Putin.

In 2016, Russia sold 19.5% of Rosneft to a consortium of Glencore and the Qatar Investment Authority (QIA) for equivalent EUR 10.2 billion. In 2026, Lukoil’s international assets are once again at the center of a potential transaction involving Gulf capital – but this time combined with American business interests and structures connected to circles around the Donald Trump administration.

The two deals are not identical. But the similarities are sufficient to raise a broader question: is Russian oil once again becoming a geopolitical currency?

Rosneft – the 2016 Template

In December 2016, a month after Donald Trump won the election, the Russian government decided suddenly to privatize 19.5% of Rosneft shares.  In a transaction hurriedly put together, it sold the shares to a consortium of QIA and Glencore for the equivalent of EUR 10.2 billion.  Curiously this price was set well below Rosneft share price on the Moscow stock exchange, while the typical structure for such deals involves a premium.

Based on public data, the buyer consortium’s SPV, QHG Shares Pte, was initially established by the Russian state-owned lender VTB.  It appears that VTB also funded the entire purchase price paid to the government. While the amount exceeded VTB’s lending limit, it is likely that a substantial part of the amount was ultimately provided by Rosneft. 

By an uncanny coincidence, also in the first days of December 2016 Rosneft issued a bond in a similar amount in roubles, which was ultimately purchased by the Russian central bank. Rosneft then sold the roubles for euros, which crashed the ruble exchange rate.  It looked like the Russian government, or even Rosneft itself with the help of the Russian central bank, was self-funding this “privatization”.  Soon after, the amount was refinanced—by the equity contributions of QIA and Glencore (the latter curiously only US$300m), plus a jumbo loan of EUR 5.2bn provided by Intesa Sanpaolo.  Again, this loan grossly exceeds Intesa’s usual exposure limits.  Prudent risk management would normally require that such such a jumbo loan to be collateralized to a significant extent with cash provided by third parties. 

Reuters subsequently reported that Russian banks, including VTB, Gazprombank and Otkritie, provided roughly $2.5 billion of financing connected to the acquisition.

In 2017, Intesa Sanpaolo tried to syndicate the loan in a more traditional fashion, but it didn’t appear to have succeeded.

The story kept getting better. A few months into 2017, the QIA-Glencore consortium was already looking to sell its freshly acquired shares in Rosneft.  The chosen buyer for 14.2% of Rosneft shares was CEFC, a murky Chinese oil and gas company, which, however, appeared not to have the money.  Helpfully VTB stepped in again offering a bridge loan.  The deal, however, fell apart when the Chinese authorities arrested CEFC founder and chairman and swiftly cracked down on CEFC.

While the Chinese government is typically supportive of energy acquisitions, it was clearly against this one.  One may speculate that the Chinese authorities and perhaps Xi personally sought to make clear they wanted nothing to do with a hot potato like the Rosneft shares. It is not immediately clear what was the danger they saw in the deal.

Glencore, enthusiastic about the deal only a year earlier, also wanted out.  Finally, the entire stake minus a few shares was left in the hands of QIA, where it stays until this day.

Someone familiar with the Kremlin’s way of structuring such of structuring such “deals” might offer speculative explanations of the purpose of this scheme. Indeed, why was the Russian government actively helping to dispose of one of its crown jewels, and below its market price at that.  The choice of Qatar is logical: the Kremlin has cultivated its relationship with the Qatari rulers, and the liaison there was Kiril Dmitriev, Putin’s factotum who has lately gained fame as Witkoff’s and Kushner’s interlocutor.

A more conventional theory is that it was another instance of Russian oligarchs close to Putin grab precious assets.  A more sensational possibility, however, would be that the equity stake was parked in a convenient location with a trusted safe keeper like the Qatari government.  Its ultimate purpose would have been to serve as bait and a conditional payment to someone so powerful whose favors could be worth billions. And here comes the coincidence with the election of Donald Trump.  Needless to say, this does not implicate Trump directly and there is no public evidence he has benefited from the scheme.

Support Independent Analysis

Help us keep delivering free, unbiased, and in-depth insights by supporting our work. Your donation ensures we stay independent, transparent, and accessible to all. Join us in preserving thoughtful analysis—donate today!

The structure raised questions about the true nature of the transaction from the outset. In an analysis published on December 27, 2016, in Bulgaria Analytica, titled “Rosneft Privatization – A Look at President Putin’s New Global Order,” I questioned whether the formal privatization concealed a more complex arrangement in which Russian state structures provided a substantial part of the financing, while QIA and Glencore supplied the transaction with international legitimacy.

How I Knew Putin Was in the Driver’s Seat

How did I conclude that Putin himself was in the driver’s seat of the Rosneft deal?

The answer was relatively simple. Just before the transaction was finalized, two things happened that, taken together, were highly revealing.

First, the Russian Central Bank became involved in a series of transactions that effectively helped provide the financing for the purchase of the Rosneft stake.  From public records it becomes clear that the central bank not only facilitated the deal, but also bought RUB 600bn bonds issued by Rosneft—effectively created the liquidity. 

Second, Alexei Ulyukaev, Russia’s Minister of Economic Development – the government official responsible for approving the sale – was arrested on corruption charges after publicly expressing his reservations about the deal, and was subsequently sentenced to eight years in prison

Third, it looks like the Russian government appeared to be helping with everything it could, including financing, to make the “privatization” and the later resale to CEFC happen.

In other words, the official responsible for giving the transaction the green light was removed from the equation, while the Russian financial system was mobilized to facilitate the transaction.

In any normal market economy, these developments would trigger public warning systems about the independence and commercial nature of the transaction.

In Putin’s Russia, they pointed to something more specific.

There was only one person who could simultaneously make the financial machinery of the Russian state serve the transaction and remove the minister who had publicly objected to it.

Vladimir Putin himself.

This was not, in itself, documentary proof that Putin personally designed every element of the transaction. But it was a powerful political signal about who was ultimately in control.

And that is precisely why I viewed the Rosneft deal in 2016 not simply as a privatization, but as a transaction in which the Russian state, its financial institutions and its political hierarchy were aligned around a strategic objective.

More important for today’s story was another conclusion. I raised the possibility that the transaction was part of a broader geopolitical operation in which Putin sought to use Russian state companies as instruments of foreign policy.

I explicitly noted at the time that I had no direct evidence linking the Rosneft transaction to the interests of the Trump family. But the timing, Qatar’s participation and the emerging rapprochement between Moscow and the incoming US administration made the transaction worth watching, particularly in light of the way the Kremlin viewed strategic energy assets as instruments of international influence.

This matters today not because it proves any conspiracy retrospectively, but because it illustrates a pattern that was already visible in 2016: Russian oil assets could be viewed not simply as corporate property, but as instruments of geopolitical realignment through which Moscow could seek to influence its relationship with Washington.

The 2016 transaction also had a clear international context. It came immediately after Donald Trump’s election, amid expectations of a possible thaw in US-Russian relations and an intensive Kremlin campaign portraying Putin and Trump as potential partners – including at Europe’s expense. My 2016 analysis also examined Qatar’s potential role as an intermediary in the emerging geopolitical realignment.

The model, however, was relatively conventional:

a Russian strategic asset + Gulf capital + a global commodity trader + international financing.

Lukoil – the new version

Ten years later, the circumstances are different, but the structure bears a striking resemblance to the 2016 transaction.

Lukoil is now seeking to sell its international assets under pressure from US sanctions. After the proposed transaction with Gunvor failed to obtain the necessary OFAC approval, and Carlyle emerged as the next major candidate, American investor Todd Boehly, who bought the Chelsea club from the Russian oligarch Roman Abramovich, who has access to and speaks on behalf of President Putin – entered the picture shortly after the September 5 meeting between Steve Witkoff, Jared Kushner and Putin.

According to information that subsequently became public, Putin himself raised the issue of a potential deal involving Lukoil’s assets during that meeting.

On September 22, the Financial Times reported Boehly’s interest and a consortium involving the US Development Finance Corporation (DFC) and influential Gulf figures connected to businesses around Trump. Reuters subsequently reported these details, noting that it could not independently verify it.

That was the important development on September 22 – the emergence of Boehly as a potential buyer. At that point, it was not yet publicly known that Putin himself had raised the Lukoil transaction with Witkoff and Kushner.

Four days later, on September 26, I published an analysis in Alternatives & Analyses, “Lukoil, Boehly and the Dmitriev Channel: Is the Deal Entering Its Final Phase?” I placed Boehly’s emergence in the broader context of contacts between Washington and Moscow and examined the potential connection between Boehly, Kirill Dmitriev and the Witkoff-Kushner channel.

At the time, I explicitly noted that there was insufficient evidence to establish a direct link between Dmitriev’s meetings and the Lukoil transaction. But the timing and convergence of channels raised the question of whether the deal had already moved beyond the boundaries of a conventional corporate transaction.

On October 3, Reuters, citing The New York Times, added information that materially changes the context.

According to the report, Vladimir Putin raised Lukoil during his September 5 meeting with Steve Witkoff and Jared Kushner in the Kremlin, presenting the transaction as an opportunity to demonstrate that Russia and the United States could once again do business together. And this is not the only deal discussed.

This is the key point: Putin himself put the Lukoil assets on the table with two of the principal Trump intermediaries in the relationship between Washington and Moscow. Not the State Department, not the Department of Treasury – the personal envoys of the President of the United States.

At the same time, Gulf business groups have emerged around the potential buyer. According to published reports, some of these interests have connections to the business networks of Witkoff and Kushner, alongside the involvement of a US government institution.

The resulting structure bears a striking resemblance to 2016:

Russian strategic oil asset + Gulf capital + international financial capital + political involvement from the Kremlin.

But there is one important difference.

In 2016, the Gulf partner was Qatar’s institutional sovereign wealth fund, QIA.

In 2026, the potential buyer is an American consortium, but once again a substantial part of the financial weight appears to come from Gulf capital.

Where does the US national interest end and the private business interests of networks close to the US president begin?

The question is particularly sensitive because this is a strategic Russian asset under sanctions. If the US government participates in structuring or approving the transaction, while the potential buyer is connected to business networks around individuals who are simultaneously conducting negotiations with the Kremlin, the boundary between a geopolitical transaction and a private investment becomes considerably thinner.

Worth noting – and potentially relevant to understanding the broader context – is the presence in the September 5, 2026 Moscow delegation of Gene Lange, the Treasury Department official overseeing U.S. sanctions policy. Lange did not attend the meeting with Vladimir Putin itself, but took part in the preparatory discussions with Putin’s economic envoy, Kirill Dmitriev. His presence is significant because it indicates that sanctions policy was part of the broader agenda of the Moscow talks.

Putin sets another trap

Putin does not view oil assets merely as commodities. That is the essential similarity between 2016 and 2026.

In 2016, I analyzed the Rosneft transaction from precisely this perspective – as a potential mechanism through which Russian state companies could be used for foreign-policy purposes and to open new channels to the West. The conclusion at the time was deliberately cautious: it was a possible scenario, but there was no direct evidence.

Ten years later, the nominally private Lukoil may serve a different purpose – potentially opening an economic channel into the political and business environment surrounding Trump.

And Putin is not particularly concerned that these are formally assets of a private Russian company. In the Russian system, the boundary between state and private ownership is blurred. Russian oligarchs understand that their ownership exists only insofar as it remains compatible with the interests of the Kremlin.

In this sense, sanctions create not only constraints but also opportunities for geopolitical maneuvering.

That is precisely what makes the story of Lukoil’s international assets so important. The issue is not simply who will buy them. The deeper question is how Putin can use control of strategic Russian oil assets as an instrument for building new political and economic dependencies.

There is another important dimension. A potential transaction could create an opportunity for ownership to change again if the political and sanctions environment changes – including the possibility of a future repurchase of the assets at a later date at a premium price.

Ten years, one logic

The two transactions are not identical, given the different starting conditions and, above all, the restrictions governing their implementation.

The Lukoil transaction, however, has a much more explicit geopolitical context: the war in Ukraine and Putin’s apparent interest in preserving Trump’s goodwill ahead of the US midterm elections.

The fact that, according to Reuters, Putin discussed the transaction with Witkoff and Kushner on September 5, while information about Boehly’s interest and the involvement of the US government and Gulf figures became public on September 22, suggests that the story has moved well beyond the boundaries of a standard corporate procedure or negotiations conducted purely at the corporate level.

The final answer is not yet known. What we are witnessing involves maneuvering at the highest levels of power in Russia and the United States, rather than a conventional capital transaction.

There is another important question:

What happens to the countries where these assets are located, including Bulgaria?

They may find themselves not merely as jurisdictions through which the transaction would pass, but as territories exposed to the consequences of decisions made between Moscow, Washington and the financial centers of the Gulf.

There is also a significant obstacle to the transaction.

Formally, the Bulgarian authorities have the ability to block or refuse to authorize a transaction that does not meet their national-security and foreign-policy requirements. Whether they would actually use that power is another question. Under Putin-friendly Prime Minister Rumen Radev, the government has so far taken a pragmatic approach toward maintaining Lukoil’s operations in Bulgaria, including securing the extension of the UK licence through government-level negotiations. This makes Bulgarian opposition to a politically backed transaction considerably less certain.

OFAC’s position is more explicit. Any transaction effectuating the sale of Lukoil International’s assets requires separate authorization from OFAC. Its current guidance states that Treasury will assess a proposed sale against U.S. national-security and foreign-policy objectives and expects, among other conditions, that the transaction completely sever Lukoil International’s ties with Lukoil, prevent funds from flowing to Lukoil, and avoid providing Lukoil with a windfall.

This is where the political dimension becomes critical. The formal decision belongs to OFAC, but the administration of President Trump ultimately controls the broader U.S. policy framework within which that decision is made. If the White House were to treat the transaction as part of a wider political understanding with Moscow, the question would not simply be whether the deal satisfies the technical sanctions criteria, but whether the criteria themselves are applied in a way that accommodates the political objective.

British approval, however, cannot be taken for granted. The UK regime continues to require licensing for operations involving Lukoil International. HM Treasury’s current guidance explicitly states that any renewal of the relevant licence will be considered in the context of the ongoing negotiations over the sale of Lukoil’s international assets.

There may also be European regulatory intervention if the specific structure of the transaction affects EU competition rules, sanctions, or strategic energy infrastructure and markets across more than one member state. The European Union is already tightening its regime toward Russian oil assets and infrastructure, including restrictions affecting refineries and transactions involving Russian oil.

The road from political bargaining to an actual change of ownership is therefore a long one. But the relevant political window could extend until the newly elected members of Congress take office in January. Until then, the transaction will remain dependent on a combination of political decisions in Washington, sanctions licensing in the United States and Britain, regulatory decisions in the countries where the assets are located, and the broader evolution of U.S.-Russian relations.

The chances that Vladimir Putin will succeed in completing the transaction are neither negligible nor assured. And this is precisely why Lukoil could turn out to be much more than another sale of Russian oil assets.

It could become a test of whether geopolitical trading in Russian energy can once again find a way through the sanctions system.

One thing is certain:

Putin is going all in – and he is putting Russian oil on the table of geopolitical bargaining.

Ilian Vassilev