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Wednesday, March 22, 2023

The US implored international merchants to not be intimidated to transact Russian petroleum.

US Treasury officials have met with the heads of the biggest oil traders Trafigura and Gunvor and urged them to resume shipping oil from Russia. On this subject writing Financial Times, citing sources.

The biggest independent oil traders have been cautious about the supply of Russian oil after the introduction of price restrictions, the newspaper noted.

One of the FT’s interlocutors noted that US officials are actively calling to “restart oil transportation.” Another source for the publication noted that Washington “really wants oil to move.”

According to the newspaper, Finance Ministry officials met with traders after Moscow threatened to cut off oil supplies.

An administration official explained that Washington’s goal is to communicate what is allowed under the price cap architecture, and that companies can make their own decisions.

Despite this, traders and banks that provide loans for raw materials supply are afraid of reputational risks, writes FT.

“Traders know the rules allow them to trade Russian oil under the right circumstances, but is it really that attractive with all the potential risks?” — asked the adviser to one of the merchants.

Trafigura announced it would stop selling oil from Russia and Gunvor cut supplies to a minimum after hostilities broke out in Ukraine. On December 5, 2022, a ban on offshore deliveries of Russian oil to Western countries began to apply. On the same day, the price cap for oil from Russia entered into force, which was approved by the G7 countries, the European Union, Australia and Norway. According to the new rules, Moscow will be able to sell oil at a price not exceeding $60 per barrel, otherwise insurance, freight and credit organizations will be prohibited from carrying out such transactions. Assistant Secretary of the Treasury for Combating Terrorist Financing and Financial Crime Elizabeth Rosenberg March 7 informedthat the G7 countries intend to review the ceiling price of Russian oil. However, she did not answer directly whether the United States expected the cap on the marginal cost of Russian energy resources to affect Moscow’s stance on the Ukraine conflict.

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