Russia’s Lukoil Calls For End To The Ukraine War, As The Oil Company Suffers Losses

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The head of Russia’s second-largest oil company, Lukoil on March 3 has called for an immediate halt to fighting in Ukraine, in a sign of weakening support for the conflict among some of the country’s influential oligarchs.

The oil giant is the first major Russian firm to speak out against Putin’s decision to invade its neighbor.

Vagit Alekperov, the billionaire founder and chairman of the Russian oil company, released a press statement, pleading for an immediate cessation to hostilities and expressed concern over the expanding conflict, as pressure mounts due to sanctions.

The Russian energy firm “expresses its concern over the ongoing tragic events in Ukraine and its deepest sympathy to all those affected by this tragedy,” said Alekperov. “We stand for the immediate cessation of the armed conflict and fully support its resolution through the negotiation process and through diplomatic means.”

President Vladimir Putin is pressing ahead with his assault in Ukraine, which began last week, despite warnings of possible sanctions from the West and its allies that would impact the Russian economy.

The wide-ranging sanctions have caused a massive drop in the ruble, causing the Moscow stock exchange to close for several days, putting Russia in its worst economic crisis in 20 years.

The crisis has wiped out billions from the fortune of Alekperov, adding to a growing number of concerned oligarchs over the economic impact of the invasion, including some inside Putin’s inner circle.

Many of the Russian oligarchs are upset after several of them have had their assets seized or frozen by Western nations under the new sanctions.

Alekperov’s statement about the Ukraine conflict follows comments from two of Russia’s powerful oligarchs, Mikhail Fridman and Oleg Deripaska.

Fridman, the co-founder of Alfa-Bank, a confidant of Putin and one of the country’s largest private bankers, said the invasion was a “tragedy” for both Ukrainians and Russians, saying that “war can never be the answer.”

Deripaska, the founder of aluminum giant Rusal, said that “negotiations must start as soon as possible,” adding that “peace is the priority.”

Whitehall is considering grabbing properties owned by oligarchs in the UK with ties to the Kremlin to put pressure on the Russian government.

The French government on March 3, said that it had seized a superyacht owned by a company linked to Igor Sechin, chief executive of Russian energy giant Rosneft and a close ally of Putin.

Meanwhile, Lukoil has thousands of gas stations in operation worldwide, including some in the United States.

In Newark, New Jersey, the city passed a resolution on March 2 suspending the business operating licenses for Lukoil stations in solidarity with Ukraine.

The head of Naftogaz, Yuriy Vitrenko, who runs Ukraine’s largest energy firm said that anti-Russian sanctions should be ramped up and targeted directly at its energy exports.

Vitrenko said that Germany’s suspension of the Nord Stream 2 pipeline was not enough.

Western countries “should make this very clear choice to get rid of this dependency on Russian gas and oil”  and that “you have to believe as if you were at war with Russia,” to stop the war from spreading, said Vitrenko to the BBC.

In Washington, Congress is deliberating on which steps to take if energy sanctions are imposed, with both parties expressing wide support on restrictions of Russian energy.

The International Energy Agency (IEA) presented a plan on March 3 for the European Union to cut Russian imports by a third within a year and urged the European Union to sign no new supply contracts with Russia’s largest gas company Gazprom.

“Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter,” said IEA Executive Director, Fatih Birol.

The S&P has estimated that international sanctions have halved the Kremlin’s available foreign exchange reserves, leaving its banking system with extremely limited access to global financial structures.

On March 2, the rating agency lowered Russia’s sovereign debt deep into junk status, with a ‘CCC-‘ rating and warned that the country may not be able to pay its debts.

Lukoil maintains that it would continue in its efforts to “provide reliable energy supplies to consumers around the world” and that it was “committed to strengthening peace, international relations, and humanitarian ties.”

Bryan Jung

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Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.



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