Russian oil companies are relying more heavily on little-known trading firms domiciled in the United Arab Emirates to market their crude, as EU sanctions force traditional players such as Vitol, Trafigura and Glencore out of the market.
Several new names have cropped up on shipping lists in recent weeks as lifters of Russian crude, some of which appear to have been incorporated in the UAE only recently.
Trading sources say one of the attractions of Dubai and the other emirates for Russian oil exporters is the UAE’s lack of interest in imposing any trade sanctions, as well as low taxation.
“Nobody pays us much attention, we just get on with the business, this is not Geneva,” a Russian trader in Dubai told Energy Intelligence, referring to Switzerland’s clampdown on Russian oil trade since the war with Ukraine started on Feb. 24.
New Entrants
One of the newcomers is an obscure entity called Tejarinaft FZCO, which appears to be registered in the UAE and whose name in Arabic translates as “oil trade.”
According to port data, Tejarinaft delivered two cargoes of Urals crude last month to Turkey and one shipment in June, each sourced from Russian state giant Rosneft.
Tejarinaft has also emerged as a regular offtaker of Russian fuel oil and gas oil from the ports on the Baltic Sea and Black Sea, with Rosneft once again the provider.
There is no official record of Tejarinaft in UAE business registries or any other databases, and more than half a dozen Dubai-based oil traders said they had never heard of the company.
Regular Offtakers
A more familiar UAE-based trading firm marketing Russian barrels is Everest Energy, which delivered a cargo of Urals crude to the Turkish port of Tutunciflik last month. Everest is also a regular offtaker of oil products from Black Sea ports, according to trading sources.
Everest was registered with the Dubai Multi-Commodities Center (DMCC) in 2018 and trades other commodities.
“We stay flexible, transparent and focused; that allows us to build reliable, long-term relationships with our partners,” the company says on its website.
Coral Energy, another DMCC-based trader and owned by an Azeri national, continues to be a regular offtaker of Russian crude and products. It also supplies crude to Turkey.
Another member of the DMCC club, GMS Trading Middle East, has appeared as a products offtaker in the Black Sea. That firm was established only in May.
Companies based in the UAE are not subject to any of the Russia trade sanctions that were introduced in recent months by the US, EU and Switzerland.
The sanctions ban commercial transactions with Rosneft, shipping company Sovcomflot and other government-controlled entities.
But due to financial sanctions that target transactions in dollars and euros, they are having to buy oil in other currencies, including the UAE dirham and Russian rubles.
“It’s impossible to escape sanctions, they are making life much more difficult for everyone,” a second Russian trader says.
Source: Energyintel.com
