MOSCOW (MRC) -- Global energy traders Trafigura and Vitol still help to export limited supplies of Russian refined products within the rules of international sanctions, but they are considering whether to resume more trade in Russia's oil, as per Reuters.
The two Swiss companies were among the largest lifters of Russian crude oil and refined products before the country's invasion of Ukraine last February. By last summer, both firms had already sharply reduced their presence in Russian oil and later sold their interests in Vostok, a major upstream development in Siberia.
"We lift limited refined products within sanctions... our position is under review," Trafigura CEO Jeremy Weir told the FT Global Commodities Summit in Lausanne, Switzerland. The United States has been openly keen to make sure Russian oil flows continued after the EU embargo took effect on Dec. 5 to prevent price spikes and has indicated that it views the trade under the G7 price cap mechanism as legal.
The current oil price dip following the collapse of three banks has combined with inflation risks to further lower new investment in oil output, with a tight market looming in the second half of the year as China rebounds from COVID-19 curbs. The U.S. Treasury recently held some talks with Trafigura to emphasize their stance, sources familiar with the matter said.
"Less than 100,000 barrels per day (bpd) of our traded volume now is Russian business. Will that move up with some slightly stronger guidance? Yes, maybe," Vitol CEO Russell Hardy told the summit.
Vitol traded 7.4 million bpd last year, down from the previous year owing to the company stepping away from more than 90% of the Russian oil business it previously did. Gunvor's co-head of trading Stephane Degenne was more circumspect.
We remind, Russia's piped supply of Urals crude to the European Union via the southern spur of the Druzhba pipeline is set to rise 6% on a daily basis in the first quarter from the three months before, data from industry sources and Reuters calculations showed. The EU pledged to stop buying Russian oil via maritime routes from Dec. 5. Supply via the Druzhba pipeline remains exempt from sanctions, though flows via its northern spur, which supplies Poland and Germany, dried up last month.