As sanctions bite, these ‘obscure’ new players are shipping half of Russia’s oil to India & China – Times of India
At least 40 such middlemen handled Russian oil trading between March and June, according to a Reuters tally.
The new players have shipped at least half of Russia’s overall crude and refined products exports of 6-8 million barrels per day (bpd) on average this year, turning the little-known companies collectively into some of the world’s largest oil traders.
The reporting shows that in May, Russia, one of the world’s top three oil producers, supplied record volumes to China and India, which have not imposed sanctions on Moscow and became its leading buyers since the war in Ukraine.
India has been one of the top buyers of discounted Russian oil over the last few months with domestic refiners lapping up crude from the European country at attractive prices.
In June, India’s imports of Russian oil hit another record with volumes climbing to 2.2 million barrels a day in June, rising for a 10th month.
Obscure middlemen
With the demand for Russian oil staying high, the European country has seen the emergence of these new networks of obscure middlemen who are helping skirt the Western sanctions.
The number of little-known trading firms relied on by Moscow to export large volumes of crude exports to Asia has mushroomed in recent months.
This is because sanctions over the Ukraine war led major oil firms and commodity houses to withdraw from business with producers in Russia, Reuters reported.
The network marks a major departure from the handful of well-established oil majors such as BP and Shell and top trading houses including Vitol, Glencore, Trafigura and Gunvor that handled Russian crude and oil products for decades.
Though there is no suggestion the trades break sanctions, they may make it difficult for sanctions enforcement agencies in Europe and US to track Russian oil transactions and prices.
The network also helped check the price cap of $60 a barrel on Russian exports imposed by G7, Australia and EU.
“When prices are above the cap, the rapidly changing trading network could make it hard to identify those involved in moving the oil, five traders involved in handling Russian oil said,” Reuters reported.
Giving an example, the report said that a Liberian-flagged oil tanker had set sail in May from Russia’s Ust-Luga port carrying crude on behalf of a little-known trading company based in Hong Kong. However, before the ship had even reached its destination in India, the cargo changed hands.
The new owner of the 100,000 tonnes of Urals crude carried on the Leopard I was a similarly low-profile outfit, Guron Trading, also based in Hong Kong, according to two trading sources.
Owned and operated by the Dubai-based Leopard I Shipping, the Leopard I arrived at Visakhapatnam port on June 15, where Indian refiner Hindustan Petroleum took delivery of the cargo from Guron Trading, data from the two trading sources showed.
The emerging companies have played a key role in keeping Russia’s oil exports moving, and even growing, as its leading crude producers Rosneft, Lukoil, Surgutneftegaz and Gazprom Neft diverted shipments to India and China.
Discounts narrow
Meanwhile, as India continues to import record volumes of Russian oil, new reports suggest that the trend may slow down soon.
An Indian government official last month said narrowing discounts and payment problems could hit India’s Russian oil imports.
Discounts have been narrowing due to Opec+’s decision to cut output.
Indian refiners mostly buy Russian oil at or below the $60 per barrel price cap fixed by the European Union and the G7 nations to restrict Russia’s oil revenue.
BPCL, the country’s second biggest state-refiner, can use about 30%-40% of Russian oil for its three refineries with combined capacity of 726,000 barrels per day.
(With inputs from Reuters)
