Rosneft and Morgan Stanley continue to work together in other areas, the state-controlled Russian oil producer said today on its website. Morgan Stanley will seek alternatives for the unit after the deal expired, the New York-based firm said today in a separate statement.

Rosneft, Russia’s largest oil company, was among the firms targeted by U.S. sanctions earlier this year in response to the confrontation in Ukraine. The scrapped deal leaves Morgan Stanley seeking other buyers for a business it has vowed to sell to boost returns and assuage regulators who are reviewing banks’ ownership of physical commodities units.

“Whatever happens, we’re going to sell that business,” Colm Kelleher, who leads Morgan Stanley’s investment-banking and trading division, said at an investor conference last month.

Mark Lake, a Morgan Stanley spokesman, declined to name other potential buyers.

The oil-merchanting unit includes Morgan Stanley’s physical oil inventory and related purchase, sale and supply agreements. It also includes oil-terminal storage agreements and the bank’s 49 percent stake in Heidmar Holdings LLC, which manages about 100 oil and chemical tankers.

Morgan Stanley agreed last year to sell the business to Moscow-based Rosneft for an undisclosed amount. While the sale received U.S. antitrust approval in June, it never gained permission from the Committee on Foreign Investment in the U.S., an inter-agency panel that examines acquisitions of companies by foreign investors for national security concerns.

The bank, along with JPMorgan Chase & Co. and Goldman Sachs Group Inc., was the subject of a two-year investigation by a Senate panel that said Wall Street’s role in owning commodities provided undue influence over prices and could threaten the economy if a bank-controlled business suffered an industrial catastrophe.

Morgan Stanley sold its stake in oil-transportation company TransMontaigne Inc. in July to NGL Energy Partners LP for $200 million.