Some of the largest international trading companies are calling on the United States to increase the transportation of Russian oil by sea. The goal of the American side is to ensure the stability of flows, as well as to strengthen supervision over Russian exports.

In particular, according to the Financial Times, representatives of the US Treasury met with the heads of Trafigura and Gunvor, including assuring them that they could increase the supply of Russian fossil fuels. as long as they do not violate the sanctions. Although Washington has not objected to the transfer of Russian oil under the terms of the G7 deal, large independent oil traders are cautious. “The Americans are actively pushing us … to return to transporting oil,” a person familiar with the talks told the Financial Times.

Meanwhile, it is noted that Russia is threatening to cut oil flows within a month due to increased support from the West in Ukraine.

For its part, of course, the US government initially pressured the G7 to impose a ceiling on Russian oil in order to cut Russia’s energy revenues. At the same time, however, he tried to provide for her normal flow oil on international markets, fearing a collapse in supplies from one of the world’s largest exporters.

“Each company has to make its own decision. Our goal is to communicate what is allowed under the terms of the restriction,” a Biden administration official told the FT, adding that the discussion focused on market structure.

What do marketers do?

Large traders, including Trafigura, Vitol and Gunvor, have significantly reduced or completely stopped their activities in Russia over the past year, fearing a backlash from the world or a reduction in bank support.

Thus, however, Russia is increasingly turning to petty traders to transport oil to new markets in Asia. Hence, there are growing concerns about the safety of the old tankers used for these shipments, and without the support of Western insurance companies or shipping services, trade becomes increasingly opaque.

In the meantime, the White House is trying to maintain a balance: on the one hand, to reduce the Kremlin’s income, on the other hand, to ensure the uninterrupted operation of the market. “One of the goals of the restriction is to ensure that oil remains on the market, albeit at a lower price, to deprive the Kremlin of revenue,” another US government official told the FT. “We are encouraged that the oil markets have indeed weathered stable in recent months, even though Russian revenues have fallen by 60% since the invasion.”

Ceilings of the West

In December, the G7 imposed a $60 per barrel ceiling on the price of Russian oil, which applies to traders using Western services to transport it. In addition, most of the G7 countries and the EU. banned the import of cargoes of Russian oil by sea. However, sales to other countries are allowed. For example, India, China and Turkey. they increased their imports recent months.

While traders are required to provide proof that the barrels were purchased at or below the ceiling, they say fulfilling the conditions in the US relatively relaxed. “The Americans really want to keep selling Russian oil,” the trader told the FT. However, Western merchants and associated banks are reluctant to make transfers due to the potential reputational impact.

“Banks are important friction point“, – told the FT consultant trading house. “Traders know that the rules allow them to sell Russian oil under certain conditions, but is it attractive, given all the potential risks?”

At one time, companies such as Vitol, Glencore and Trafigura competed for the right to export Russian oil, turning to Putin ally Igor Sechin, the head of Rosneft, or even to the Russian president himself.

Finally, it is noted that many of the big traders have recently been targeted by the US Department of Justice, facing fines and investigations into the potential for bribery and other forms of corruption in developing countries. In 2014, the US State Department said Putin could have “access to Gunvor funds” because he sanctioned co-founder Gennady Timchenko, a close associate of the Russian president. Gunvor vehemently denies the allegations.