U.S. sanctions under Trump weaken Putin’s foothold in Balkan states

The pressure from Donald Trump’s sanctions on Russia landed hard in the Balkans, and governments there moved fast because the White House deadline left no room for games.

Bulgaria lawmakers met in Sofia and, according to Bloomberg, said they had to deal with the problem after Lukoil PJSC, one of the companies hit by the sanctions, still controlled the country’s biggest oil refinery.

Parliament seized the Neftohim refinery near the Black Sea, removed Lukoil’s rights, and handed full control to a temporary manager. The committee needed only 26 seconds to end 26 years of Russian ownership so Bulgaria could show Washington it wasn’t dragging its feet.

The event triggered the sharpest reduction of Russia’s economic reach in the Balkans in decades. Trump’s sanctions targeted Russian oil companies directly, and that struck at the economic power that Vladimir Putin had spent years building in a region where governments are caught between Western allies and old Russian ties.

Bulgaria moves to remove Lukoil from economy

Bulgaria’s Lukoil has long said it was being pushed to sell its refinery and its 220 gasoline stations, but nothing changed until Trump’s decision forced the government to act.

Ruslan Stefanov, chief economist at the Center for the Study of Democracy in Sofia, said, “The core of Russia’s influence is built upon energy domination through oil and gas, remains of the Soviet times that weren’t broken for years. Much of this is now gone. These are the last breaths, which is why they cause so much anxiety.”

Officials in Bulgaria started to rethink their position after Putin launched the full invasion of Ukraine in February 2022. The country is preparing to adopt the euro and deepen its ties with the European Union, but it stayed linked to Russian energy for too long.

Bulgaria’s connection to Russia stretches back centuries, including its 1878 independence from Ottoman rule in the Russo‑Turkish war and decades of loyalty during the communist era. The shift away from Russian ownership was always going to be messy.

On November 7, Parliament passed a bill that allowed the seizure of Neftohim, just hours after the US Treasury rejected commodity trader Gunvor as a buyer for Lukoil’s foreign assets and called it a “Kremlin’s puppet.”

Ten days later, Rumen Spetsov, the former head of Bulgaria’s tax authority and a bodybuilding champion, took over as the state‑appointed manager. His appointment helped Bulgaria convince Washington that Lukoil’s Bulgarian revenue wasn’t being rerouted back to Russia.

That move bought Neftohim time to keep operating until April. Prime Minister Rosen Zhelyazkov said Bulgaria may request another six‑month extension if ownership remains unresolved.

If the refinery is sold, the money will be held in an account Lukoil can’t access while under sanctions. Buyers from the United States, Europe and the Persian Gulf have shown interest.

Lukoil said it was taking “all necessary steps” to sell the refinery, the fuel network and the rest of its Bulgarian assets.

Ilian Vassilev, who served as Bulgaria’s ambassador to Moscow, said, “The question is not whether the transition away from Russian ownership will eventually happen — it will. The real question is whether Bulgaria will shape that process — or be shaped by forces entirely beyond its control.”

Serbia rushes to keep NIS alive as oil runs short

Serbia is facing its own crisis. The country’s major refiner, Naftna Industrija Srbije (NIS), which is controlled by Gazprom, lost oil supplies last month when several US sanction waivers expired.

President Aleksandar Vucic asked Gazprom to find a buyer fast so the government would not have to take over the company, but NIS has enough crude for only one week. If nothing changes, the country will need to tap reserves or import more expensive oil from elsewhere.

Vucic said on November 16, “If they don’t agree on a purchase price, my proposal is that we offer a better price. Whatever it costs, we’ll find the money,” while stressing that his government wanted to “avoid confiscation, nationalization.” He also said a solution must come by November 23.

Serbia’s ties with Russia go back to the breakup of Yugoslavia. After NATO bombed Serbia in 1999 to stop the war in Kosovo, Russia backed Serbia’s refusal to recognize Kosovo’s independence, giving the Kremlin political influence it still holds. But the energy dependence has now become a liability.

Trump’s sanctions changed the balance. Mario Bikarski, senior Europe analyst at Verisk Maplecroft, said opportunities for Russian political and business leverage in the region “have shrunk.”

He added that even if the war in Ukraine ends and sanctions ease, Russia “will struggle to regain its influence in the region’s energy markets given a larger pool of more reliable suppliers and partner countries,” and “Moscow would have to search for alternative avenues to maintain geo-economic influence over the region.”

Get up to $30,050 in trading rewards when you join Bybit today