In an effort to find different ways to export vast amounts of oil under the weight of Western sanctions over the country’s invasion of Ukraine, a new Reuters report found Russia has been relying on an increasing number of little-known trading firms to help ship the oil. According to the report, at least 40 middlemen handled Russian oil trading between March and June of 2023.
These middlemen include Dubai-based Leopard I Shipping and Hong Kong-based Guron Trading, as well as companies with no prior record of involvement in the oil trading business. Combined, the companies have shipped at least half of the 6-8 million barrels of crude and refined products Russia exports each day.
These trading firms primarily ship the Russian oil to China and India. In June of 2023, an International Energy Agency report found “in May 2023, India and China accounted for almost 80% of Russian crude oil exports.”
“In turn, Russia made up 45% and 20% of crude imports in India and China, respectively,” the report read.
There is no suggestion yet that Russia’s use of trading firms to ship oil breaks sanctions. However, it may make it difficult for sanctions enforcement agencies in the West to track Russian oil transactions and prices.
Earlier in July of 2023, Russia’s oil price benchmark jumped above the price cap imposed by the Group of Seven nations, the European Union and Australia back in December of 2022. Experts say when this happens, Russia’s increased reliance on obscure trading firms could make it hard to identify those involved in moving the oil.
