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Despite U.S. sanctions, oil traders help Russian oil reach global markets
quoteMuch of this oil trade is facilitated by a highly efficient and sometimes controversial group of middlemen: oil trading firms. Oil traders act as global matchmakers between the countries and companies that pump oil and the refineries that process crude into gasoline and other fuels.
Trafigura is one of a handful of companies in Switzerland that handles about a quarter of the world's oil each day. For decades, these firms have sourced much of their oil from Russia. About 80% of Russian commodities are traded in Switzerland, according to a 2021 report from the Swiss Embassy in Moscow. Some oil traders also have stakes in Russia's state oil company and its assets, including in a megaproject in an environmentally fragile part of the Russian Arctic.
In the weeks following Moscow's invasion of Ukraine, many trading firms have said they are reviewing their holdings in Russia. Yet traders continue to facilitate the flow of Russian oil and, last month, even increased their Russian oil trading activity, says Oliver Classen, spokesperson for Public Eye, a commodity trading watchdog group in Switzerland.
"We're just looking at data that suggests that key traders working out of Switzerland have significantly stepped up their activities in the war month of March," Classen says.
Some of the trading firms that handle the most Russian oil say they're legally bound to fulfill preexisting contracts to lift Russian crude and are complying with all sanctions. Trafigura and the commodity trading firm Gunvor tell NPR that they condemn the war in Ukraine. Another trader, Glencore, directed NPR to its website, where it also condemns the war. The firm Vitol announced last week that it would stop trading Russian oil by the end of this year.
But for now, the traders' continued loadings have big implications for Russia's ability to wage war in Ukraine, says Alexandra Gillies, an adviser at the Natural Resource Governance Institute, an organization focused on extractive industries.
"In this situation," Gillies says, "they're offering a financial lifeline to Vladimir Putin and his government."
"These are some of the most economically important transactions to the Russian state right now," she adds, "so any steps to make those transactions more difficult, I think, is really important."
end quote
Maybe the United Nation's should have more power to address and enforce "Sanctions and Invoke penalty upon those who violate Sanctions", Sanction backed by the U.N. should have the power to cause a freeze or nullification of contracts. Given this power, the U.N. Security Council, would have more power to enforce "peace keeping globally".
Too many people are greed driven in their ways of seeking to circumvent sanctions, We need a system where 'greed driven men" cannot usurp and circumvent" International Sanction Agreements. Penalty has to be devastatingly severe !!!!
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