Major Commodity Broker Trafigura Completely Halts Russian Crude Oil Purchases

by Park Pyunghee

Published 27 Apr.2022 10:49(KST)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major commodity broker Trafigura announced on the 26th (local time) that it will completely stop purchasing Russian crude oil before May 15, when the European Union (EU)'s restrictions on the sale of Russian crude oil take effect.

In a statement, Trafigura also said it would significantly reduce the volume of refined products purchased from the Russian state-owned oil company Rosneft.

According to the EU's financial sanctions against Russia, brokers will not be allowed to purchase crude oil from Rosneft after May 15. However, the EU has allowed exceptions for purchases in cases that are "strictly necessary" to meet Europe's energy demand.

Industry insiders said brokers were confused by the ambiguous condition of "strictly necessary." However, brokers have decided not to purchase Russian crude oil regardless of whether the condition is met. Given the intense international criticism of Russia, they judged that purchasing Russian crude oil would damage their corporate image and result in greater losses.

Recently, the environmental group Greenpeace also halted the maritime transportation of Russian crude oil, including that of Trafigura.

Another commodity broker Vitol stated that the volume of Russian crude oil transactions will significantly decrease in the second quarter due to a reduction in already contracted volumes. Vitol also announced that it will completely stop trading Russian crude oil by the end of this year.