The future of Russia’s international oil and gas giant Lukoil’s assets remains shrouded in fog. However, it is clear that the forced dismantling of Lukoil’s empire, which is triggered by US sanctions, could be one of the most consequential energy auctions of the post-Cold War era. It is no longer merely a compliance-driven divestment; it has now been pivoted into a geopolitical contest. The latter is not only by Western majors and private equity companies, but also by Gulf sovereign investment machines, all vying for key pieces of Russia’s overseas presence. The bidders' list, including ExxonMobil, Chevron, Carlyle, ADNOC, and IHC, with Saudi parties possibly added soon, highlights the shifting regional influence and strategic interests at play.
The Russian company’s assets are not marginal; they include prominent positions in Iraq’s West Qurna-2 field, significant stakes in Kazakhstan’s Karachaganak and Tengiz, and large gas operations in Uzbekistan, all of which are seen as prime upstream assets by others. When these assets are sold, they could significantly alter regional power balances, as they are small enough to be fragmented but large enough to influence regional dynamics wherever they land.
After the collapse of the proposed Gunvor acquisition, due to Washington’s interference and fears about links to Moscow, the hope for a single-buyer divestment has been removed from the table. Currently, the auction process is fragmented and politically curated, with bidders not only offering capital but also aligning with Washington's geopolitical preferences. It may also involve assessments from Brussels, adding further geopolitical complexity. Abu Dhabi has now entered this space, further shaping the political landscape.
As media reports, Abu Dhabi’s national oil company, ADNOC, and sovereign wealth fund/investment company, IHC, have advanced on separate tracks that increasingly look like two branches of the same strategic tree. The Abu Dhabi NOC, operating through its upstream expansion and its new global gas investment arm, is clearly focusing on the most strategically essential pieces. It has, as it seems, set its eyes on the gas assets in Uzbekistan, upstream stakes in Kazakhstan, and long-term options linked to Lukoil’s Iraq positions. These moves are fully connected and integrated into ADNOC’s broader restructuring from a national champion into a globally diversified portfolio player. In recent years, ADNOC has established a partnership process with Western majors and has made aborted but telling attempts to acquire LNG businesses in Australia.
Abu Dhabi-based IHC, chaired by Sheikh Tahnoon bin Zayed, has focused on downstream and retail assets, such as the Burgas refinery and Balkan retail chains. This strategy aims to acquire distressed assets with deep political complications, which IHC has repeatedly demonstrated it can turn into profitable influence-building platforms across India, Africa, and emerging markets, despite the risks involved.
Analysts are constantly asking themselves what to make of the overlap among the leadership of ADNOC, ADQ, and IHC in such a case. Taking facts on the ground, the overlap makes the separation between these entities more logistical than strategic. Keep in mind that, to outside observers, these Abu Dhabi entities may appear to be different actors. To insiders, it is clear that they represent a coordinated Abu Dhabi expansion into the vacuum created by Russia’s sanctions-induced retreat.
For the UAE and Abu Dhabi leadership, the current situation shows a convergence of several incentives. The acquisition of a part of the Lukoil portfolio will embed Emirati influence in Central Asia. For Abu Dhabi, it is essential, as the latter region is where China has dominated pipeline politics and where Russia’s leverage is eroding. The acquisition of Lukoil assets will also give the UAE greater leverage over southeastern European refining capacity and fuel logistics. Given that Brussels is working to sever its last links to Russian supply chains, this is a desirable option, and the timing is clearly correct. Said, an acquisition of Lukoil’s assets would improve ADNOC's long-term, de-risked upstream options far beyond the Gulf. At the same time, and perhaps even more crucial than the current assessment, these options will all be under the political cover of U.S. sanctions compliance. Abu Dhabi definitely understands that it will be allowed to represent itself to Washington, aka the Trump Administration, as an indispensable partner, especially in the controlled unwinding of Russian hydrocarbon interests.
When looking for a potential reaction from Europe, especially the EU or its member states, it is to be expected that they will find comfort in the idea of Lukoil’s assets being taken over by a U.S.-aligned Gulf actor. Brussels wants these assets out of Moscow’s hands. Still, they do understand that there is a need not only for a buyer with deep pockets but also one who can maintain supply security and invest in upgrades—taking all of this into account, including how to ensure that Brussels, ADNOC, and IHC fit that bill. While the options may be clear, after last week’s Washington meetings, the geopolitical story does not end there.
A Dark Horse could still be entering the ongoing conversations: Saudi Arabia. Riyadh has not made a public move, but there is an increased likelihood that Saudi Arabia will make a late bid, either through Aramco or the Public Investment Fund. The logic is more compelling than it may first appear.
For years, Aramco has been seeking greater upstream exposure outside the Kingdom, with strong interest already in Iraq. West Qurna-2, a crown jewel of Lukoil’s overseas portfolio, is precisely the kind of asset Aramco has sought but failed to secure through bilateral talks with Baghdad. The current opportunity to re-enter discussions and acquire a stake through a sanctioned divestment process with U.S. alignment is not only feasible but could offer a shortcut into one of the most strategic oilfields in the Middle East.
At the same time, as reported before, Saudi Arabia’s PIF is also shifting its global energy strategy. The Saudi SWF, after years of prioritizing downstream projects and expansions, is now interested in acquiring upstream and midstream assets as a hedge against global volatility. Combining Aramco and PIF’s strategies, it would be easy to argue that Lukoil’s African, Central Asian, and Middle Eastern upstream positions are an ideal fit for this diversification.
For Saudi Arabia, there is another significant development that could be pivotal in all. Last week’s meetings between Saudi Crown Prince Mohammed bin Salman and US President Trump were very successful; a new bond has been formed. For the Lukoil divestment, this is a highly politically sensitive issue, but given the bromance between Trump and MBS, the emergence of closer strategic coordination could lead to a successful Lukoil strategy. Their recent meeting in Washington sent a clear message, not only to the world, but definitely to the Middle East: a second Trump Administration may regard Saudi Arabia as its primary Middle Eastern partner. In that case, Abu Dhabi could be playing a secondary, though still significant, role. The option that Trump could view the Lukoil breakup as an instrument to reward allies, to weaken Russia in a controlled fashion, and to secure global flows under U.S.-aligned Gulf ownership, Riyadh could be positioning itself as Washington’s preferred custodian for some of these assets.
This possible, politically charged scenario could radically change the shape of the auction and its outcome. For Abu Dhabi, the situation would mean it loses its early-mover advantage, especially if there is a US politically blessed Saudi strike. Abu Dhabi should be facing a formidable new contender if Aramco’s operational scale, its intimate relations with the U.S. energy establishment, and Riyadh’s new weight in Trump-era foreign policy calculations are going to play a role. In this case, it can be expected that the Iraqi, Kazakhstani, and possibly African upstream assets will end up in Saudi hands. Abu Dhabi, however, could keep its advantage in European downstream or Central Asian gas. A possible coordinated Gulf carve-up is not out of the question. Such a situation and deal would represent a new phase of intra-Gulf alignment and rivalry, where both states expand aggressively but in ways that do not directly collide.
For Europe, the situation mentioned above again poses risks, as it would find itself increasingly dependent not only on Gulf molecules but also on Gulf-owned infrastructure. Europe’s energy dependence would be shifted substantially. Suppose the Bakan refineries are in the hands of IHC, Central Asian gas, ADNOC, and Iraqi oil. In that case, Europe will be less vulnerable to Moscow or Putin and more to the geopolitical priorities of Abu Dhabi and Riyadh. Both Arab giants are reliable, but have also shown themselves to be increasingly transactional.
Washington’s position is clear: it has no issue with Gulf NOCs owning assets. If this means that the Chinese state companies do not hold power over Russian assets, the light will turn green. At the same time, a US–Gulf re-architecture of global hydrocarbons, in which Arab NOCs are aligned with American energy strategy, has long been discussed behind closed doors. The first test case for the alignment could be the Lukoil divestment.
For Moscow, all is humiliating and necessary. The Putin regime needs Lukoil’s divestment to proceed smoothly to prevent asset seizures, legal challenges, and the complete collapse of its corporate footprint abroad. For the Kremlin, Gulf parties' involvement is the least damaging option.
While markets may view the Lukoil auction as a commercial sale opportunity, reality shows it is a quiet redrafting of global energy ownership. Abu Dhabi moved early, but Saudi Arabia could still be a decisive closer. Washington could decide early that if Aramco or the PIF steps in, with American political backing, Lukoil's assets could move to Riyadh. Still, all is open and undecided. Abu Dhabi, if it prevails, still will be able to consolidate its position as the most agile and geopolitically sophisticated energy investor of the decade.
One conclusion of the last days is hardening; Russian energy assets abroad are not simply being divested. They will be repurposed into a new global order shaped by Gulf capital, U.S. oversight, and the strategic vacuum created by Russia’s isolation. It is also essential to understand that the Gulf is poised to become the architect of the post-Russian energy landscape.
By Cyril Widdershoven for Oilprice.com