Italy's Ludoil acquires a Sicilian oil refinery as the war affects fuel supplies in Europe.

Ludoil has reached an agreement to purchase the Sicilian oil refiner ISAB from the Cypriot private equity firm G.O.I. Energy, as announced by the Italian company on Wednesday. The ongoing conflict in Iran has highlighted Europe's reliance on the Gulf for jet fuel and other refined products.

"With this deal, an asset of critical national significance is returning to Italian ownership," stated Ludoil, which supplies jet fuel to Rome's Fiumicino airport.

In recent years, Italy's Moratti and Brachetti-Peretti families have sold their oil refineries to commodity trader Vitol and Azerbaijan's SOCAR. Ludoil was already negotiating with G.O.I. Energy regarding ISAB when the U.S. and Israel took action against Iran on February 28.

Founded in 1954 by the grandfather of current chairman and CEO Donato Ammaturo, Ludoil expects its consolidated revenue to exceed 10 billion euros ($11.7 billion), positioning the new company as Italy's top privately held multi-energy firm. "The acquisition will transform ISAB from a traditional refinery into an energy company, enhancing competitiveness, supply security, and the creation of new energy value chains," Ludoil stated.

With a diverse portfolio that includes coastal storage terminals and a fuel retail network, Ludoil plans to fully integrate ISAB and establish a biofuel operation for the refinery. The transaction will occur in two phases, beginning with Ludoil acquiring a 51% stake in ISAB, pending several conditions, including approval from the Italian government under its golden power regulations.

Ludoil has not disclosed the amount it will pay for the stake and has not provided additional details. The Italian government considers ISAB a strategic asset, as it represents over 20% of Italy's refining capacity. G.O.I. Energy purchased it from Russia's Lukoil in 2023.

Ludoil did not clarify whether an existing agreement with the global trading company Trafigura for raw material supply and finished product purchases would continue. According to a source familiar with the deal, Trafigura is expected to maintain its supply and offtake contract with ISAB's Priolo refinery.