Six little-known companies, including those created less than a year ago, are involved in the export of about 1.5 million barrels of oil per day from Russia, according to Bloomberg. This is enough to cover the total demand of Britain or Italy, that is, firms have become one of the largest resource traders in the world.
Bloomberg refers to some “Russian customs data” for the period from December 5 to 31 last year, which contains records of all contracts for the export of Russian oil, indicating customers. The top 15 buyers included Chinese and Indian state-owned companies and foreign divisions of Russian giants, but also the six above-mentioned traders.
The agency calls Nord Axis Ltd the largest of them, which in December bought more than half a million barrels of Russian oil per day, and it was from Rosneft. According to the article, the company was registered in Hong Kong in February last year, and in the summer it acquired a stake in a Rosneft project called Vostok Oil from global trader Trafigura. Bloomberg was unable to contact Nord Axis or even locate the company’s website.
Also among the “kings of Russian oil” the agency lists Hong Kong’s Concept Oil Services and Dubai’s Coral Energy (both registered a long time ago, but were not considered giants), as well as Dubai’s QR Trading and Hong Kong’s Bellatrix Energy (both are generally unknown to the agency).
Bloomberg does not indicate where the data on contracts for the export of Russian oil was obtained from. The agency was unable to contact most of the companies, and Dubai-based Coral Energy said that they no longer trade in Russian oil. Independent analyst Dmitry Lyutyagin talks about the alleged “kings”:
“If you look from the point of view of numbers, the volume of these oil traders is quite interesting, because the 1.4 million barrels per day that they have now begun to pass through themselves is about 30-35% of the volume that the Russian Federation previously exported to the foreign market, and this export went through other, traditional for us oil traders – Trafigura, some others, that is, this is a kind of indicator that the Russian oil industry and commercial services, our oil companies, to some extent, learned to work with the foreign market, were able to raise these companies and try to pass volumes through them. The only question I have so far is how long this scheme will last and how the United States will treat this and react to it.
According to Bloomberg, at least one of the companies, Bellatrix Energy, received loans from the sanctioned Russian Agricultural Bank. Could the alleged “kings of Russian oil” be targeted for sanctions? Sergey Glandin, a partner at the NSP law firm, an expert in sanctions law, comments:
– If this company is registered in the United Arab Emirates, in Hong Kong, that is, in any jurisdiction far from the United States, then American regulators have rather constrained opportunities to trace and control these companies in any way. Moreover, if these companies trade in any currency other than the US dollar, American jurisdiction does not appear here in any way. And the US financial authorities and law enforcement agencies have no way to influence these contracts here.
– Can the American authorities try to influence through the official Hong Kong and Dubai?
– Through Dubai, they periodically try to influence, let’s remember how in late January – early February of this year, US Deputy Secretary of the Treasury Brian Nelson went to the UAE to communicate, in Russian, to frighten the local elite so that they would not so zealously observe loyalty to to the Russian Federation and observed the regime of American sanctions. I don’t know how it ended, in Turkey we periodically see different news, how they either restrict transit, or our banks are disconnected from the Mir card. There is nothing of the kind in the UAE yet, since the country has the best experience of interacting with the US authorities, being a kind of hub in relation to Iran for more than 40 years. Therefore, they have these practices very well developed there. Of course, we will see more and more voyages of American law enforcement officers, representatives of the State Department and financial authorities in the UAE and Hong Kong, but I think things will still be there.
Bloomberg reminds that trading in Russian oil in itself does not contradict Western sanctions, however, numerous rounds of restrictions have pushed the market into the shadow zone. According to the agency, most of the supply of Russian fuel today goes in the direction of countries that did not support the oil ceiling regime.