(Bloomberg) – As the world’s biggest oil traders cut their exports of Russian crude, the market is trying to figure out who will fill the void.
Responses include a medium-sized Geneva-based trader with strong ties to Moscow, several smaller businesses that are becoming more active, and completely new names, including one called Bellatrix – the name of an evil wizard from the world of Harry Potter.
Russia’s ability to find intermediaries, ships and buyers for its crude is critical both to the global oil market and to Moscow. The fewer barrels the country exports, the greater the pressure on supply, but also on the nation’s income.
The wide range of traders shows how – for now – Russia is weathering the pullback of Trafigura Group and Glencore Plc, two of the world’s biggest commodity traders. Vitol Group, the world’s biggest oil trader, also said it would not touch new Russian business and its business would decline from this quarter.
Litasco SA, a unit of Moscow-based producer Lukoil PJSC, has become the largest Urals flagship quality manager in Russia, according to port agent reports compiled by Bloomberg. He hired tankers to transport at least 14 million barrels in April and 8.6 million already this month, far exceeding anyone else’s share.
There are no legal obstacles to transporting Russian oil, although the US and UK have announced phased bans, and Europe is still expected to do so in the coming weeks.
Geneva-based Litasco declined to comment on the exchanges, but said the company, along with its subsidiaries and affiliates, complied with all laws and regulations. The trader said it was taking “all necessary measures to mitigate the impact of the international situation on ongoing operations, customers and consumers”.
The majority of Litasco’s shipments probably came from Lukoil. In the past, at least some European refiners would have hired tankers to move them. Most have left the Russian business since the war, meaning Litasco not only has to sell the barrels but also handle shipping them.
Significant changes are also taking place in Asia, from where Russia exports more than 350 million barrels of crude annually, most of it going to buyers in that region. That’s almost a quarter of the country’s crude exports.
Shandong Port Group Co., a company with close ties to oil refiners in the Chinese province of the same name, has hired the tanker Kriti Future for a 1,500 kilometer journey to move the Pacific Ocean from Eastern Siberia from Russia, or ESPO oil, from the port of Kozmino to China. this month, according to ship brokers and fixtures seen by Bloomberg.
No one answered calls to the general office of Shandong Port Group and an email was not immediately answered.
The company, supported by the local government, has several ports, warehouses and its own fleet of ships. It said in a WeChat statement posted on its official account that a tanker carrying 100,000 tons of crude is expected to arrive in Dongjiakou, near Qingdao, in mid-May.
Shandong Port Group’s involvement and its ties to local businesses suggests that some receivers of ESPO crude are starting to get more directly involved in bringing more Russian barrels, likely because major cargo traders have backed off, according to people. involved in the market.
At least two Chinese oil companies and an international trading house stopped loading these Kozmino shipments for shipment to China earlier this month, traders said.
“Major traders – including state-owned ones – have announced very public blackout dates to stop trading Russian oil this month and this comes well after many shipping companies have walked away from trading” , said Anoop Singh, head of the tanker. research at Braemar ACM Shipbroking Pte.
“If there is a total EU ban, then Russian oil trade will have to become more private, while some of those cheap barrels will continue to flow to limited outlets in Asia,” he said. -he adds.
The most unusual name to lift the flagship rank of the Urals in Russia is a company called Bellatrix. This month, it has ships carrying nearly 3 million barrels of crude, according to port agent information compiled by Bloomberg. Two ship brokers and three traders said they had never heard of Bellatrix before and were unable to obtain her contact details.
Bellatrix’s May shipments account for a quarter of all Urals crude from the Baltic Sea port of Primorsk, where the name of the company shipping the barrels is listed. Bellatrix Lestrange is a character from the Harry Potter books and films. It has never appeared before in port agent reports compiled by Bloomberg.
Oil traders and ship brokers across Asia said more ships laden with cargoes of Russian crude had also been leased by smaller charterers. The anticipation of an EU ban, coupled with the exit of major companies, is putting increasing pressure on Asian customers to openly stop taking those barrels, traders say.
In Asia, a company called Livna Shipping Ltd. increasingly involved in a key trade. The Hong Kong-registered shipping company has been listed as a charterer of eight vessels to deliver Russian ESPO crude to China so far in May, according to data from marine analytics firm Vortexa Ltd. The company was a relatively small participant in April and had only two charters, and none in March.
Vessels Agistri and Kriti Verano loaded ESPO crude from Kozmino through Livna in early May and traveled to Qingdao and Yingkou in China, according to vessel tracking data from Bloomberg. Five additional vessels were chartered by Livna to deliver the variety to Chinese buyers later this month, while Agistri was hired twice for the trade. The trip usually takes less than a week after loading.
A person who answered the phone at Livna in Hong Kong declined to comment.
Other emerging names include Coral Energy, which lists a Dubai address and phone number on its website, which makes numerous references to Russian operations.
At least as interesting as who transports Russian oil is who doesn’t. Glencore’s name has not appeared as the shipping company for any Urals crude since April. The company said in March it would honor pre-existing contracts but would not sign any new business deals in Russia.
Similarly, Trafigura shipments also appear to have fallen sharply this month.
So far in May, the company has lined up tankers to transport 200,000 tonnes from the Urals. That’s down from over a million tonnes in March and April. Trafigura declined to comment.
Vitol remained a relatively large Urals shipper this month, but also pledged to cut. It had ships for more than 14 million barrels of crude in April and May, according to port data, second only to Litasco.
“Oil volumes will decline significantly in the second quarter as current forward contractual obligations decline, and we expect this to be complete by the end of 2022,” Vitol said in a statement in April.
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