Lukoil ex-chief warns EU off Russian ban

The former head of Russia’s secondbiggest oil group has warned a European ban on the country’s “impossible to replace” crude would be “the most negative scenario” for all parties, as EU discussions on an embargo intensify. Vagit Alekperov, who stepped down as chief executive of Lukoil last month after he was hit by western sanctions, said that any EU move to cut off Russian oil imports would be “a shock for everyone”. In his first press interview since stepping down, the billionaire told the Financial Times: “By imposing sanctions, western countries gave a clear signal and declared their position. There is no need to further tighten them.” Alekperov’s comments come amid fierce debate among European nations on whether to instigate an oil import ban that would ratchet up the pressure on Moscow but further exacerbate Europe’s energy crisis. He acknowledged that such a move would mean “Russia will have to reduce production, freeze wells, as we did at the beginning of the pandemic in 2020, because it is impossible to redirect all European volumes to other markets overnight. “Of course, the sanctions against the Russian economy and the general desire to abandon products from Russia have made it very difficult for the industry,” he said. But he warned that for the EU, “it is impossible to replace such a major energy exporter as Russia, even in the medium term”. Building new infrastructure to redirect Russian crude currently flowing to Europe would take years, he said, particularly in an environment where the global industry had already lost “hundreds of billions, trillions of dollars” of investment in recent crises. Alekperov was one of the longestserving oil executives in Russia until UK and Australian sanctions against him prompted him to step down from Lukoil after 30 years at the helm. He saw it through its 1993 privatisation, a London listing, and the transition to international reporting standards. The LSE suspended trading in Lukoil in March. He retains an 8.5 per cent stake directly or via family trusts or investment funds. Forbes estimated his wealth in May at $22bn, down from almost $25bn last year. Like other Russian businesses, Lukoil has been hit by various western measures targeting Russia’s economy. The company warned last month it may need to shut refineries. Alekperov was targeted with sanctions for benefiting from or continuing to support the Russian government, as the UK treasury explained it. But he insisted Lukoil and its management had no influence over political decisions or processes. His decision to step down, one of dozens of executives to resign from Russian companies in the wake of the war in Ukraine, “was made for the sake of the company, although I won’t hide it, it was a sad one for me”.