Trading houses across the globe are set to slash purchases of crude and fuel from Russian companies as soon as next month in a bid to escape sanctions on the country amid its invasion of Ukraine.
- Sources close to the matter said major trading firms would scale back purchases from state-controlled oil firms such as Rosneft in compliance with sanctions of the European Union which seek to isolate Russia from the rest of the globe.
- A major buyer of oil from Russia, Trafigura said it would comply with all applicable sanctions, with traded volumes expected to be cut down further starting May 15. Vitol earlier said it would reduce purchases significantly in the second quarter.
- European refineries are starting to avoid the processing of Russian crude, impacting exports from Moscow. This is partly offset by the acquisitions made by countries such as India, Turkey, and China.
The International Energy Agency earlier this week said it expects the Russian oil supply to fall 3 million barrels per day from May.
OIL is down 0.77%, while USO is down 1.38%.