Trafigura is the "New King" of Russian Oil Trading

by Ship & Bunker News Team
Monday April 6, 2015

Commodities trader Trafigura is emerging as the dominant player in Russian oil trading, Reuters reports.

The company has signed a deal with Rosneft to export $500 million worth of crude oil from Russia's Baltic, Mediterranean, and Pacific ports.

In total, Rosneft is understood to have allocated 1.6 million tonnes of oil, representing more than 10 percent of Russia's, and 38 percent of Rosneft's, total seaborne oil exports.

"That is really beyond all expectations," said a trader with one of Trafigura's competitors.

"Trafigura is the new king of Russian oil. For now."

It is not yet clear whether Trafigura's April deal with Rosneft will become a longer term arrangement, or extend past oil trading.

Before February, Rosneft is said to have been allocating Trafigura only two tankers per month, which was far outstripped by deals with rivals such as Vitol and Glencore as well as oil majors Eni, Total, and Shell.

But the new deal will see the trader allocated 10 cargoes of Urals product, up to seven of CPC Blend from Baltic and Black Sea ports, and two of light ESPO crude from the Pacific in April.

According to the report, increased volumes for Trafigura have come at the expense of supply to oil majors rather than Glencore and Vitol.

"We will have to buy from the spot market now," said a trader for one of those companies.

Rosneft was said to be planning to expand its global oil trading presence through the purchase of Morgan Stanley's oil trading division.

However, the plans were blocked as a result of escalating Western sanctions following the Russian Federation's invasion of the Crimea.

At the beginning of this year, European shippers and port operators were said to be bracing themselves for a slow down in the Russian economy as a result of lower oil prices and Western sanctions.

In January, Aegean Marine Petroleum Network Inc. announced it was expanding into Russia through the hire of ex-OW Bunker professionals to market bunkers from a St. Petersburg office.