On January 10, the U.S. Department of the Treasury announced new sanctions against Russia’s energy sector, including Gazprom Neft and its subsidiaries, among them Jamiyati Doroi Masouliyati Mahdud (LLC) Gazpromneft-Tajikistan, a Tajikistan-based Gazprom Neft subsidiary Gazpromneft-Tajikistan.

The U.S. Government has identified Russia's energy sector as a critical source of revenue used to finance the conflict in Ukraine. Following the U.S. decision, the UK also imposed sanctions on Russia’s energy sector, specifically targeting Gazprom Neft.

Gazpromneft-Tajikistan’s role in Tajikistan’s energy market

Gazpromneft-Tajikistan is the dominant supplier of petroleum products in Tajikistan and is listed in the country’s antimonopoly registry. The company, as an official dealer of Russia’s Gazprom Neft, supplies fuel and petroleum products from the Omsk Oil Refinery and liquefied natural gas (in smaller volumes).

Additionally, the company sells fuel both wholesale and retail to businesses and consumers across 43 gas stations throughout Tajikistan.

How will sanctions affect Tajikistan?

Gazpromneft-Tajikistan has declined to comment on its future operations under sanctions, citing its inability to discuss political issues.  No official statements from Tajik authorities have been provided so far.

However, independent legal experts argue that Tajikistan as a state is not at risk of secondary sanctions for allowing Gazpromneft-Tajikistan to continue operations.  Secondary sanctions target specific individuals and businesses, not entire countries.

They note that companies cooperating with Gazprom Neft could be subject to secondary sanctions and banks processing transactions in U.S. dollars or euros for Gazpromneft-Tajikistan could also be at risk.

Navrouz Odinayev, founder of the legal firm Himoya, notes that Gazprom Neft, operating through its subsidiary in Tajikistan, assumes these risks itself by operating through its Tajik subsidiary.

Potential economic impact on Tajikistan

Some experts warn that Tajikistan should distance itself from a sanctioned company that plays a dominant role in the country’s energy market.

They believe continued operations by Gazpromneft-Tajikistan could lead to fuel shortages, price hikes, and economic instability.

However, distancing from the company is not an easy decision, as 96% of Gazprom Neft’s shares are owned by Gazprom, which is controlled by the Russian government.