FT: European energy traders continue to make significant purchases in Russia

Two of the world’s largest independent energy traders, Vitol and Gunvor, remain significant buyers of refined oil products from Russia. Both companies continue to buy large volumes of Russian oil more than a year after pledging to drastically scale back their dealings with Moscow following Russia’s invasion of Ukraine. An analysis of Russian customs records on exports for the first four months of this year shows that both firms were among the ten largest buyers of refined products such as petrol and diesel, the Financial Times (FT) reported.

Swiss-based Gunvor was the eighth-largest buyer by value. It shipped one million tonnes of oil products worth around USD 540 million (CZK 11.7 billion). Vitol, whose management is based in London and Geneva, was the tenth-largest buyer. It shipped around 600,000 tonnes worth approximately USD 400 million.

Both companies confirmed that they regularly buy refined Russian fuel. However, they disputed the accuracy of the data.

Western sanctions do not prohibit trade in refined products, and Washington has even supported it as a way to limit supply disruptions, provided traders comply with restrictions imposed by Western countries after the invasion. The restrictions include a price cap set by the G7 group of leading economies this February, which establishes the maximum price Moscow can receive for selling refined products.

However, potential difficulties in complying with the price cap, combined with the risk that trading with Russia could damage a company’s reputation in Europe, have prompted a number of traders, including BP and Shell, to suspend their business with Russia. Vitol and Gunvor suspended only their trade in Russian crude oil.

Customs export declarations are one of the last remaining tools for analysing Russian trade flows, as Moscow stopped publishing its overall statistics last year. The data show that a total of 50 companies exported USD 16 billion worth of refined oil from Russia in the first four months of this year.

Gunvor says its records show that it bought more than 700,000 tonnes worth around USD 330 million during the period covered. Vitol said the customs declarations do not match its internal records, but declined to provide its own data. It reiterated comments made by its chief executive, Russell Hardy, in March this year, when he said the company trades less than 100,000 barrels a day. Over four months, that would amount to a maximum of 1.5 million tonnes.

According to customs records, Gunvor and Vitol are the only two Western companies among the ten largest buyers of Russian refined oil. The other eight are either Russia-controlled traders or recently established entities in the United Arab Emirates, Hong Kong and Singapore. The top spot belongs to Litasco, the trading division of Russia’s Lukoil.