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Global commodities giant Trafigura confirmed today that it will stop all crude oil purchases from Russian state-backed Rosneft by May 15th. It is the latest commodities trader to cut ties with the crude oil exporter amidst mounting pressure to cut off Russia’s oil revenue due to the war in Ukraine.
Initially, Trafigura had stated that it would only continue with existing contracts and not sign new deals with Rosneft. However, it faced backlash for still continuing to trade Russian commodities and thereby funding Russia’s war with Ukraine.
The Swiss commodities trader handles about 25% of the world’s oil each day. Other companies to cut off ties with Russian commodities traders include energy giants like BP, ENI (Italy), Equinor (Norway) and Shell. Trafigura’s competitor, Vitol group, stated it will cease crude oil and refined products from Russia by the end of this year.
May 15th is the European Union’s deadline for companies to cease oil purchases from Russian state-backed enterprises like Rosneft as part of its financial sanctions against Russia. Currently, roughly 50% of Russia’s 4.7 million bpd (barrels per day) is exported to the EU.
The EU is also considering more options to extend its current sanctions, such as tariffs, price caps, and escrow payments. To minimize the impact of the EU sanctions, Russia has sought measures such as demanding payments for their oil in roubles.
With the sanctions from Europe, Russia is increasingly looking outside the EU, at countries such as India and Turkey to fulfill orders. The Indian Oil Corporation, India’s largest refiner, made a purchase of 3 million barrels of Urals on March 23rd.
By Gandahari Cooray for Oilprice.com
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