On March 30, 2026, the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) issued General License No. 131D (GL 131D), replacing GL 131C, which was set to expire on April 1, 2026. The new license extends through May 1, 2026, the authorization to negotiate and enter into contingent contracts for the sale of Lukoil International GmbH (“LIG”), the Austrian holding company through which Lukoil holds its overseas assets outside Russia. Simultaneously, OFAC updated two interpretive FAQ responses: FAQ 1224 and FAQ 1225.

GL 131D is the fourth iteration of this license. To understand why OFAC has renewed it repeatedly without authorizing the underlying transaction, it is necessary to examine the logic of the Lukoil sanctions and the conditions OFAC has set for final approval.

Background: How Lukoil Came Under Sanctions

On October 22, 2025, OFAC designated Lukoil to the SDN List as part of a campaign to increase pressure on Russia’s energy sector. The stated objective was to curtail Russia’s ability to generate revenues funding its military. Designating Russia’s largest private oil company was one of the most consequential sanctions steps taken against the Russian oil sector by the Trump administration.

The designation immediately exposed a structural problem: Lukoil operates an extensive network of overseas assets outside Russia that, on one hand, were subject to blocking and, on the other, serve Western consumers with no connection to war financing. Unlike sanctions targeting Russian state entities, the Lukoil sanctions required a more calibrated approach.

From GL 131A to GL 131D: A Timeline of Extensions

The GL 131 series reflects a step-by-step expansion of the time window within which parties may negotiate the sale of LIG without violating the sanctions regime.

November 2025: OFAC issued GL 131, initially authorizing negotiations and the execution of contingent contracts for the sale of LIG. The license also covered maintenance and wind-down activities for all LIG entities. It was set to expire on December 13, 2025.

December 2025: GL 131A extended GL 131 through January 17, 2026.

January 2026: GL 131B extended GL 131A through February 28, 2026.

February 2026: GL 131C extended the authorization through April 1, 2026.

March 30, 2026: GL 131D extends the authorization through May 1, 2026.

Running parallel to the GL 131 series is GL 128B, issued on December 4, 2025, for the narrower purpose of authorizing maintenance and operational activities at Lukoil’s retail gas stations outside Russia. GL 128B is set to expire on April 29, 2026.

What GL 131D Authorizes

GL 131D covers two categories of activity.

First, negotiations and contingent contracts. The license authorizes all transactions otherwise prohibited under E.O. 14024 that are ordinarily incident and necessary to negotiating and entering into contracts with Lukoil for the sale, divestiture, or transfer of LIG or any entity in which LIG holds a 50% or greater direct or indirect interest. Any contract executed under GL 131D must receive separate OFAC authorization in the form of a specific license.

Second, maintenance and wind-down. The license authorizes all transactions ordinarily incident and necessary to maintain the operations, contracts, and agreements of LIG entities. Blocked accounts of LIG entities may be used, debited, and credited in connection with these operations.

GL 131D does not authorize: unblocking of property blocked under other parts of 31 C.F.R. Chapter V (other than account transactions); transactions with other SDN-listed persons not covered by the license; or transfers of funds to any person or account located in the Russian Federation.

OFAC’s Conditions for Approving the Final Transaction

Like its predecessors, GL 131D does not authorize the actual sale of LIG, only the preparatory steps. In its updated FAQ 1224, OFAC has set out the minimum conditions that must be met before any separate authorization for the transaction itself will be considered:

• Complete severance of ties with Lukoil. The transaction must fully terminate any relationship between LIG and Lukoil. Partial divestiture or any continuation of operational dependency is impermissible.
• Blocking of proceeds owed to Lukoil. Any amounts due to Lukoil under the terms of the transaction must be placed in a U.S.-jurisdiction account and remain blocked until sanctions are lifted. In other words, Lukoil will not receive the proceeds from the sale of its overseas assets for as long as the sanctions remain in effect.
• No upfront benefit to Lukoil. The transaction must not provide Lukoil with any advance value, whether in the form of cash payments, asset exchanges, or equity transfers.
• Pre-clearance of subsequent dispositions. The purchaser of LIG’s assets must commit to obtaining OFAC’s advance approval before undertaking any subsequent disposition of material LIG assets.

OFAC expressly reserved in FAQ 1224 the right to revoke GL 131D at any time if Lukoil and LIG are not demonstrating good-faith participation in divestiture negotiations.

Why OFAC Keeps Extending the License

Four consecutive extensions over five months are unusual for OFAC sanctions practice. It suggests that negotiations over the sale of LIG are active but unresolved, and that OFAC is prepared neither to lift the restrictions (which would undermine the sanctions rationale) nor to allow the negotiation process to collapse.

The logic underlying the GL 131 series is twofold. On one hand, OFAC is systematically creating conditions for Lukoil’s overseas assets to pass to undesignated buyers and be fully severed from the Russian beneficiary. This is consistent with a broader strategy of isolating Russian revenues without destroying assets that continue to serve Western consumers. On the other hand, each extension is a signal to Lukoil: the window is not open indefinitely, and it can close.

The wider context matters as well. The GL 131 series is developing in parallel with the broader relaxation of Russian oil sanctions reflected in GL 133 and GL 134. The underlying logic, however, is fundamentally different: GL 133 and GL 134 addressed short-term oil market stabilization, while GL 131D is aimed at the structural separation of Lukoil’s overseas assets from the Russian sanctions perimeter.

Practical Takeaways

For companies potentially involved in negotiations to acquire LIG assets, or operating in adjacent sectors, GL 131D raises several concrete questions.

The negotiating window is narrowing. It closes on May 1, 2026, unless, of course, there is a further extension in the form of GL 131E.

Contingent contracts require precise compliance. Any agreement executed under GL 131D must expressly condition its effectiveness on the receipt of a separate OFAC specific license. A contract that omits this clause creates sanctions exposure for all parties.

The deal structure is not freely negotiable. The purchaser of LIG cannot freely agree to payment terms: the mechanism requiring that proceeds owed to Lukoil be blocked is a mandatory condition, not a negotiating point. This materially affects asset valuation and the financial modeling of any transaction.

Multi-jurisdictional analysis is essential. LIG is an Austrian holding company with assets in multiple European jurisdictions. In addition to U.S. sanctions, any transaction will require analysis of applicable European and national restrictions. If your company is considering participating in these negotiations or operational interaction with LIG entities, we recommend consulting a specialist.

Conclusion

GL 131D should not be read as a routine technical measure. Four extensions over five months reflect the underlying complexity: the Lukoil sanctions placed significant pressure on Russia’s largest private oil company while simultaneously creating operational difficulties for its overseas entities serving Western consumers. OFAC is attempting to resolve that tension, creating the conditions for assets to pass to new owners while completely severing them from the Russian beneficiary.

The parameters for the final transaction set out in FAQ 1224 are specific. Any attempt to circumvent them means OFAC will not approve the deal, and the Lukoil sanctions will remain fully in effect.