Iraq Company from Russia 2026: After the Lukoil Exit

Iraqi law does not bar Russian investors. There is no nationality condition in the Companies Law, and a Russian shareholder faces the same 49% ceiling in federal Iraq as a French or Indian one.

What changed is everything around that. In October 2025, UK and US sanctions on Lukoil were followed by Lukoil declaring force majeure on its West Qurna-2 contract. In January 2026, Iraq's Ministry of Oil moved to take control of field operations to avoid production disruption. In February 2026, Iraq approved an amicable settlement transferring operations to the state-owned Basra Oil Company, covering outstanding invoices and the employment of foreign personnel, verified by an external auditor.

West Qurna-2 was Lukoil's largest foreign asset, a 75% stake in a field producing around 460,000 barrels per day, roughly a tenth of Iraq's crude output. The flagship Russian position in Iraq is gone, and Chevron has been in exclusive talks to take it on.

That is the context any Russian entry now sits in.

Key facts for Russian founders

The obstacle is not Iraqi company law. It is whether a bank, a counterparty and a currency channel will carry the transaction, and that is decided on facts a guide cannot assess.

What the 2026 sequence actually demonstrates

1. 1October 2025UK and US sanctions imposed on Lukoil. The company declares force majeure on the West Qurna-2 contract.
2. 2January 2026Iraq's Ministry of Oil moves to take control of field operations to avoid a production disruption.
3. 3February 2026An amicable settlement is approved, transferring operations to Basra Oil Company and covering invoices and foreign personnel.
4. 4AfterChevron enters exclusive talks over the field. The largest Russian foreign asset in the country has changed hands.

The instructive part is what did not happen. Iraq did not legislate against Russian ownership. It acted to protect production from the consequences of sanctions imposed elsewhere, and it settled rather than expropriated.

For a smaller Russian investor the read is the same: your problem is not Iraqi permission. It is whether the chain around the transaction, the bank, the correspondent, the counterparty and the currency channel, will carry it.

Two things the sequence establishes, and they matter for a much smaller investor:

• Iraq did not legislate against Russian ownership. It acted to protect production from sanctions imposed elsewhere, and it settled rather than expropriated.
• The screening that unwound a multi-billion dollar position is the same screening a small transaction meets, at the bank, the correspondent, the counterparty and the currency channel.

Where the constraint actually sits

• The bank. Iraqi banks with correspondent relationships apply sanctions screening across the whole ownership chain. An account is not a formality for a sanctioned-nexus profile.
• The official dollar channel. Access requires a valid tax identification number and documentation verified through the Iraqi embassy in the exporting country, on top of transaction-level screening. Detail in business bank account in Iraq.
• Counterparties. International operators and their contractors run their own screening, and a supplier that cannot be onboarded is not a supplier.
• The Ministry of Interior clearance. Every foreign shareholder, of any nationality, passes it before being recorded, and the process is opaque by design.

4 monthsfrom the October 2025 sanctions to the February 2026 settlement

0Iraqi legal changes directed at Russian shareholders over the same period

5screening gates between registration and a functioning business, and only one of them is Iraqi law

What Iraqi law says, for completeness

The routes are compared in foreign ownership in Iraq and the process is in how to register a company in Iraq. None of it turns on where the shareholder is from.

What not to do

• Do not build a structure that depends on the ownership chain not being read. Iraq requires the ownership structure to be disclosed and the Ministry of Interior clears every foreign shareholder.
• Do not treat a third-country holding company as a solution. Screening is applied to what the documents show, and a layer adds cost rather than opacity.
• Do not assume the Kurdistan Region changes the sanctions position. It changes the ownership rule, not the banking chain.
• Do not proceed on a general read. Sanctions exposure is fact-specific, moves quickly, and is the one question on this page that genuinely requires counsel.

What is worth checking before spending anything:

• Whether an Iraqi bank will onboard the ownership chain as it stands, which is the question that decides the rest.
• Whether the intended counterparties can onboard you, since an operator that cannot screen you will not contract with you.
• Whether the sector is one where the dollar channel is used heavily, because that is where the friction concentrates.
• Whether the facts are unusual enough to need sanctions counsel, which they often are.

The bottom line

Iraq has not closed its door to Russian investors, and it is worth being accurate about that rather than repeating a simpler story. What has changed is that the largest Russian commercial position in the country unwound through sanctions in the space of four months, and that the practical machinery of doing business in Iraq, the bank, the correspondent, the dollar channel and the counterparty, now applies that same screening to smaller transactions.

If your facts are unusual, that is a conversation with sanctions counsel rather than with a formation agent. If they are not, the honest answer is that the environment moved a long way in 2026.