Commodity Majors Continue To Buy Russian Oil Despite Exit Pledge

Commodity trading heavyweights Gunvor and Vitol are still large buyers of Russian petroleum products despite the pledges they made last year to pull out of this business.

Export data from the Russian customs authorities analyzed by the Financial Times has revealed that Vitol and Gunvor were among the ten biggest buyers of Russian refined petroleum products in the first four months of this year.

Swiss Gunvor bought 1 million tons of Russian fuels worth some $540 million, making the company the eighth-largest buyer of the products, the Financial Times reported.

Vitol was the tenth-largest buyer of Russian oil products in the four-month period, with 600,000 tons worth some $400 million.

The Financial Times noted in its report that trading in Russian fuels was not banned under Western sanctions on Moscow but it was limited by the price cap regime implemented by the G7 last year. It is also seen as bad for companies’ reputations.

The price cap led many commodity traders to exit Russian oil and fuels simply because it was too much hassle to monitor prices and make sure they are below the cap. The FT notes that BP and Shell were among those who stopped trading in Russian crude and fuels. Gunvor and Vitol also exited Russian crude but stayed in Russian fuels, it seems.

The two commodity traders confirmed they had traded in Russian fuels this year but said the numbers were inaccurate, the FT reported. Gunvor said it had actually bought 700,000 tons of Russian fuels and not 1 million tons. Vitol did not provide its own purchase figures, only telling the FT the customs data was inaccurate.

Trafigura was also among the buyers of Russian petroleum products this year although it didn’t make it to the top 10 list of buyers, which is dominated by Russian-controlled companies such as Litasco and Novatek.

By Charles Kennedy for Oilprice.com

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