Russian oil producer Lukoil has declared force majeure on oil shipments at its West Qurna-2 oilfield in Iraq, reported Reuters, citing sources.
This move signals that sanctions against Russia’s second-largest oil producer are starting to affect its international operations.
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Last month, the US imposed penalties on the company as part of President Donald Trump’s initiative to increase pressure on Moscow to end its war in Ukraine.
Last week, Lukoil sent a letter to Iraq’s Oil Ministry, stating that force majeure conditions prevented it from undertaking normal operations at West Qurna-2.
Located north-west of Basra, West Qurna-2 is one of the world’s largest oilfields and accounts for around 9% of Iraq’s total oil output.
It produces approximately 480,000 barrels of oil per day (bopd), according to oilfield officials.
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By GlobalDataLukoil’s decision to invoke force majeure, which is permitted under its contract, offers legal protection from penalties for failing to fulfil its obligations.
If the force majeure issues remain unresolved for six months, Lukoil may shut down production and leave the project, an Iraqi official told Reuters.
Following the US sanctions, Iraq’s state oil marketer, SOMO, cancelled the loading of three crude oil cargoes from Lukoil’s share of production at West Qurna-2.
Lukoil is exposed to overseas markets, with operations across Europe, Central Asia, the Middle East and the Americas.
The company produces around 500,000bopd outside Russia, roughly 0.5% of global output.
In a separate development, Bulgaria is preparing to seize Lukoil’s Burgas refinery.
The Bulgarian authorities are inspecting and implementing security measures at the refinery to maintain its operation while preparing for a possible takeover.
Bulgaria recently passed legal amendments allowing the government to take control and sell the refinery to a new owner to protect the plant from US sanctions.
Recently, Swiss commodity trading firm Gunvor withdrew its bid to acquire international assets from Lukoil after the US Treasury publicly criticised the deal and signalled its opposition.
