US Extends Lukoil Sanctions Waiver Until 2027, Allowing Continued Service Operations

The United States has extended a sanctions waiver for Russian oil company Lukoil, permitting its service operations outside of Russia to continue until April 2027, the Treasury Department announced on Thursday. This new general license will enable Lukoil petrol stations to serve customers, including those in the US, until April 25, 2027. The waiver supersedes a previous license that was scheduled to expire this month. The existing license prohibits the "transfer of funds to any person or account located in the Russian Federation" and excludes transactions involving Russia's central bank, its national wealth fund, and the Ministry of Finance.

In a separate development, the Treasury Department also authorized certain transactions for Lukoil Bulgaria's firms during the same period. This decision follows a recent announcement by US President Donald Trump regarding a deal with Russian President Vladimir Putin that would facilitate Russia's supply of diesel to the US and global markets. This agreement has reportedly created a division among US and European partners, including Ukraine, and within President Trump's Republican Party.

President Trump stated that Russia would initially release 300,000 tonnes of diesel to the US and global markets, with an additional 500,000 tonnes to follow in November, and a further million tonnes shortly thereafter. He also indicated that Russia would supply three million tonnes of fuel within a short timeframe, contingent on the condition of the country's diesel refineries.

Meanwhile, oil prices remain elevated amid the ongoing seven-month Iran war. Tanker traffic through the Strait of Hormuz is significantly below pre-war levels, and Iranian attacks persist in the waterway. Brent global benchmark crude futures fell by 0.27% to $105.8 a barrel on Thursday, while West Texas Intermediate futures saw a gain of 2.76% to $97.71 a barrel. Diesel prices also stayed high at $6.31 a gallon, a notable increase from the average of $3.65 a gallon recorded at the same time last year.

The International Energy Agency's governing board announced on Thursday that it would expedite the release of over 20 million barrels of diesel and the remaining volumes from emergency stocks of crude and other oil products, totaling 400 million barrels, which were previously agreed upon in March. The IEA anticipates that oil market balances will remain in a deficit well into 2027. The agency warned that