A $20 billion acquisition of LUKOIL's overseas oil business by Carlyle Group has been stuck in U.S. government review for nearly 10 months, leaving refinery capacity unused while global fuel prices keep climbing. The transaction covers LUKOIL assets across 17 countries and has already received approval from the U.S. Treasury's Office of Foreign Assets Control, but it still awaits a final U.S. government sign-off. Sources familiar with the matter say the decision is caught in an interagency process involving the National Security Council, the State Department, and the Department of Energy.

One person involved in the process said: "We've lost track of this thing. It's going nowhere." "It's just sitting there, waiting for something I don't even know what." Carlyle argues the deal would ease pressure on global energy markets by giving it control of three European refineries and boosting gasoline and diesel output. Middle East conflict and Ukrainian strikes on Russian refineries have created an especially severe diesel shortage, pushing U.S. and European prices to record highs.

Carlyle noted: "There is significant underutilized refining capacity within LUKOIL's European assets that could help add refined product supply to the market and alleviate fuel price pressures." The firm also stated: "After reaching a conditional agreement earlier this year, we look forward to a resolution that provides a path forward for these assets and the broader international portfolio."

LUKOIL's European operations include refineries in Bulgaria and Romania, plus a 45% stake in the Zeeland facility in the Netherlands. The three refineries together have a total capacity of roughly 400,000 barrels per day, but the Petrotel refinery in Romania has been offline since routine maintenance last year. People involved in the process estimate that if Carlyle completes the deal, it could add between 100,000 and 150,000 barrels per day of refining capacity.

The U.S. imposed sanctions on LUKOIL in October of last year to increase pressure on Moscow over Ukraine, effectively separating its international operations from the Russian parent company. Washington previously blocked trader Gunvor from acquiring these assets. LUKOIL subsequently wrote down about $20 billion related to the business in March. The portfolio also includes roughly 3 billion barrels of proven and probable oil and gas reserves, producing about 250,000 barrels per day.

One person familiar with the transaction said: "These are orphan assets." "They are waiting for the U.S. government to decide who the next owner will be. In the meantime, they are just sitting idle and being wasted because they are not being invested in." The U.S. has repeatedly extended temporary licenses allowing these assets to keep operating while the issue remains unresolved. The latest extension runs through October 22, nearly a year after Carlyle first began negotiations on the assets. Congress this week passed the Lindsey Graham Act, designed to intensify pressure on Moscow by targeting Russia's energy and defense industries.