Despite US Sanctions, Russian Diamonds Are Secretly Traded... Confusion Increases

by Lee Minwoo

Published 18 Sep.2022 20:44(KST)

Market Disruption Due to Low Prices... Only Companies Participating in Sanctions Suffer Losses

Source=Getty Images

[Asia Economy Reporter Minwoo Lee] Despite U.S. sanctions, Russian diamonds are being secretly traded on the international market, causing confusion in the market, according to an analysis.

On the 17th (local time), Bloomberg in the U.S. reported this citing anonymous sources.

In April, the U.S. Department of the Treasury added Russia's Alrosa, the world's largest diamond rough supplier, to the sanctions list. Consequently, companies importing and cutting Russian diamond rough have also decided to sever ties with Alrosa one after another.

However, some companies in India and Belgium have been secretly purchasing diamonds from Alrosa at low prices, causing market disruption. Bloomberg cited sources saying there are about 10 such companies.

When such rough stones enter the diamond market, confusion arises. Once the rough stones appear on the market, they are resold multiple times before being crafted into precious metals, making it virtually impossible to trace their origin. As a result, companies that have stopped purchasing Russian diamonds face supply shortages.

Alrosa accounts for about one-third of diamond rough supply. All Russian diamonds mined before the Ukraine war have already been exhausted. European luxury brands have requested Alrosa's competitor, the British company De Beers, to increase diamond supply, but it seems difficult to suddenly increase the volume.