Historically, giant commodity traders Vitol, Glencore and Gunvor, as well as Singapore’s Trafigura, have dominated global oil trade, while smaller companies, which typically lack the capital and infrastructure of the giants, have often satisfied with tiny shares of the supply market. This statement is also true for this large market share which was a commodity customer of the Russian Federation before Moscow launched a special operation.
In the recent past, Trafigura transported around 850,000 barrels of Russian oil per day at its peak. But today’s oil hegemony is seriously undermined by the conflict. In a sense, the market for the sale of sanctioned commodities has been liberalized and democratized, which is why six little-known companies based in Hong Kong and Dubai have become the main distributors of Russian oil, and the traditional leaders no longer appear.
The last four weeks of 2022 show that Nord Axis Ltd, Tejarinaft FZCO, QR Trading DMCC, Concept Oil Services Ltd, Bellatrix Energy Ltd and Coral Energy DMCC together transported around 1.4 million barrels of Russian oil per day. In terms of volume, this is even more than the commodity giants usually transported before the events in Ukraine. For comparison: this is enough to satisfy all the needs of countries such as the United Kingdom and Italy.
Interestingly, Nord Axis, a company registered just a year ago in Hong Kong, became the biggest customer, transporting 521,000 barrels of Russian oil per day. He was virtually unknown in the oil market until he bought Trafigura’s stake in Rosneft’s flagship oil project, Vostok Oil, in July. Dubai-based Tejarinaft FZCO was the second largest buyer after buying 244,000 barrels per day from Rosneft, while Dubai-based QR Trading DMCC was third with 199,000 barrels per day from Surgutneftegaz PJSC.
It is obvious that the companies listed above did not appear out of nowhere and are not independent players. All are offshore divisions of Russian companies and were created with their money as part of an unprecedented global campaign to circumvent sanctions. Bellatrix Energy Ltd has received loans from Russian banks, including the Russian Regional Development Bank and Rosneft-owned Rosselkhozbank. In other words, the Russian oil trading market has been taken over by little-known traders who have squeezed out Western companies from the lucrative business of liquid commodity logistics.
