3.20.22
Earlier this month, former foreign minister Sir Alan Duncan warned of the risk of imposing too many sanctions on Russia. He warned the economic retaliation could backfire, with a high cost for Britain. The former Conservative MP highlighted in an interview the risk to future UK gas supplies from sanctions. The message was clear: ministers need to tread carefully in waging economic war against the Kremlin. Duncan, a former minister of state for Europe and the Americas, told BBC Radio 4’s Today programme: “Of course we want to disadvantage Russia, but we don’t want to disadvantage ourselves that we fall into some kind of dystopian economic collapse. And we are on the edge of that.” It was a sobering analysis, but failed to note that sanctions also threatened to bite into the revenues of some of the world’s biggest energy traders, including Duncan’s own employer, Vitol. It was said that Duncan worked for a large energy trader in the interview, but did not mention his firm’s significant stake in the biggest oil project in Russia since the fall of the Soviet Union, one that Vladimir Putin has said will “strengthen Russia’s position in the Arctic”.
Vitol and Trafigura, two of the biggest oil traders, have stakes in Vostok Oil, a vast oil and gas oil project in the Arctic. It is one of Vladimir Putin’s key projects, described by the Moscow Times as “the biggest project in the modern-day global oil industry”. The scheme will take advantage of the melting Arctic ice, transporting oil across once unpassable shipping lanes via the Northern Sea Route to Asia, circumventing western sanctions. The £110bn project is led by the state-owned Russian firm Rosneft, which is led by oligarch Igor Sechin. The UK government sanctioned Sechin, one of Putin’s inner circle, with an asset freeze and travel ban, earlier this month. Vitol and Trafigura now face questions over their links to Rosneft. Vitol, which has 40 offices around the world including London, Geneva and Rotterdam, said: “Vitol has in place long-term contracts with Russian entities which it is legally obliged to fulfil. All our business is conducted in strict accordance with applicable sanctions.” The firm said Duncan’s Today interview was conducted on a personal basis. It said: “It was not at Vitol’s behest and the company did not know about the interview until it aired.”
