As the world’s largest oil traders have pulled back from trading Russian crude, smaller, lesser-known companies have stepped in to fill the void. These little-known traders now dominate Russia’s international oil markets.
The shift is due largely to sanctions imposed by Western countries on Russia following its 2014 annexation of Crimea and other foreign policy decisions. As a result, major players, such as Glencore Plc and Trafigura Group Pte Ltd., are staying away from buying or selling Russian crude for fear of running afoul of regulations that could lead to fines or even prison sentences for their executives.
In response, small trading firms with less exposure in western markets are taking advantage of what they view as an opportunity rather than a risk – these companies can purchase large amounts of discounted Russian crude without having to worry about potential penalties from governments abroad. In addition, some larger European refiners who still trade with Russia have also increased their purchases through these smaller firms instead of dealing directly with Moscow themselves due to the political climate surrounding the country at present time.
By relying on these new market participants instead of traditional ones like Glencore and Trafigura, Moscow has been able secure higher prices for its exports while avoiding any direct involvement itself – something which would likely draw further scrutiny from Western nations if it were known that it was actively involved in international trade deals again after being sanctioned several years ago. This arrangement has proven beneficial to both parties: The Kremlin gets more money out of its resources while traders get access to cheap barrels without worrying about legal repercussions.
Read more at OilPrice.com
