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Low-profile traders help ship half Russia’s oil exports to India, China


A Liberian-flagged oil tanker set sail in May from Russia’s Ust-Luga port carrying crude on behalf of a little-known trading company based in Hong Kong. Before the ship had even reached its destination in India, the cargo changed hands.
The new owner of the 100,000 tonnes of Urals crude carried on the Leopard I was a similarly low-profile outfit, Guron Trading, al-so based in Hong Kong, according two trading sources.

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The number of little-known trading firms relied on by Moscow to export large volumes of crude exports to Asia has mushroomed in recent months, since sanctions over the Ukraine war led major oil firms and commodity houses to withdraw from business with producers in Russia, reporting by Reuters has found.
At least 40 middlemen, including companies with no prior record of involvement in the business, handled Russian oil trading between March and June, according to a Reuters tally after speaking to 10 trading sources along with analysts from think-tank Kpler and analyzing data from Refinitiv and the non-public books of shipping companies.
The new players have shipped at least half of Russia’s overall crude and refined products exports of 6-8 million barrels per day (bpd) on average this year, turning the little-known companies collectively into some of the world’s largest oil traders, according to Reuters calculations based on private information from the 10 trading sources and Eikon data.
The companies began appearing after Russia’s February 2022 invasion of Ukraine, which Moscow calls a special military operation, with as many as 30 middlemen involved in trades over the course of last year, according to the tally.
The network marks a major departure from the handful of well-established oil majors such as BP and Shell and top trading houses including Vitol, Glencore, Trafigura, and Gunvor that handled Russian crude and oil products for decades.
There is no suggestion the trades break sanctions, although they may make it difficult for sanctions enforcement agencies in Europe and the United States to track Russian oil transactions and prices.
Earlier this month, Urals prices jumped above a price cap of $60 a barrel on Russian exports imposed by the Group of Seven na-tions, Australia and the European Union from December 5 that was intended to punish firms involved in any trade above that level.
When prices are above the cap, the rapidly changing trading network could make it hard to identify those involved in moving the oil, five traders involved in handling Russian oil said.
The reporting shows that in May, Russia, one of the world’s top three oil producers, supplied record volumes to China and India, which have not imposed sanctions on Moscow and became its leading buyers after sanctions by Europe, the United States and other powers limited their own purchases.
Neither Guron Trading or Bellatrix Energy, the company that origi-nally chartered the Leopard I and bought the cargo from Russian oil company Rosneft, responded to requests for comment. Rosneft did not respond to questions.
The websites for Guron Trading and Bellatrix Energy appeared to have been taken down recently. Both were online prior to the companies being contacted by Reuters.

Trading at sea

Along with the emergence of the new companies, once rare multiple trades while ships are at sea have become widespread, the five sources involved in Russian oil trading said. The sources described at least 10 such trades, which happen with little public documentation and aim to make Russia’s oil exports more difficult to track, they said.
One buyer of Russian oil likened the rise and fall of the new trad-ers to the brief careers of TikTok stars, while another trader de-scribed a “kaleidoscope” of new players. In some cases, a single cargo will pass through at least three traders, the oil buyer said.
Under the previous system, oil cargoes were generally handled by one well-known trader from source to destination.
Reuters could not establish the ultimate owners of the new trading companies.
The growing network of pop-up traders overlaps with a booming market for old oil tankers supplied by new companies to carry Russian oil that Western shippers are avoiding.
The new trading network and practices raise financial risks for Russian oil companies dealing with unknown entities with limited credit history.
Some of the companies that emerged as major traders of Russian oil last year, such as Coral Energy and Everest Energy, have since exited the business.
Responding to questions from Reuters, both denied they left the trade because of sanctions risks. Everest said “it was a strategic business decision based on various factors specific to our company.” Coral said “we made a decision to source outside of Russia thanks to the diversified footprint in MENA region.”
The US Treasury department’s sanctions enforcement agency, OFAC, and its EU and UK counterparts did not respond to requests for comment for this story.
In July, a US Treasury official said sanctions were designed to keep Russian oil in the market, dampening prices for consumers while limiting oil revenues Moscow uses to finance the war in Ukraine.
“We recognize that (sanctions on Russia are) going to change the shape and structure of the Russian oil markets,” the official told reporters.
The official also said Washington was unconcerned that sanctions were resulting in more trades in currencies other than the dollar — after a rise in the use of yuan and UAE dirham to settle Russian oil transactions as Moscow finds itself shut out from international banks.

Multi-year export high

Owned and operated by the Dubai-based Leopard I Shipping, the Leopard I arrived at Visakhapatnam port on June 15, where Indian refiner Hindustan Petroleum took delivery of the cargo from Guron Trading, data from the two trading sources showed.
Hindustan Petroleum didn’t immediately respond to a request for comment.
The emerging companies have played a key role in keeping Rus-sia’s oil exports moving, and even growing, as its leading crude producers Rosneft, Lukoil, Surgutneftegaz, and Gazprom Neft diverted shipments to India and China.
Helped by this network, Russian oil exports from all sea ports reached a multi-year high in April and May at nearly 4 million bpd, according to Reuters calculations based on polling of 10 traders as well as Russian port loading programs and Refinitiv data.
In May, Russian seaborne oil supplies to India, which was a rare buyer of Russian oil before the war, reached a record of 1.95 million bpd while China imported 2.29 million bpd.
Only Lukoil continues to market oil through its trading division — Litasco — which it relocated to Dubai from Geneva.

The other companies sell to the new trading firms, which are mostly registered in China, Singapore, Hong Kong, or Dubai, according to the five sources and local public company registers.
Media representatives for Rosneft, Surgutneftegaz and Gazprom Neft didn’t answer Reuters requests for comment.

Payment delays

The strategy brings risk for Russian producers. Venezuela, which uses a similar system to move oil, has suffered payment problems, fraud, and losses.
While there have been no reports to date of non-payment, delays have caused some problems, the five traders involved in the Russian oil business said.
Russian exporters waited between three to five months to get paid after their cargoes sailed, the sources said. Normally, buyers pay for the cargoes about a month after the ship sails, they said.
One source said such delays created a fiscal gap for exporters who were having to pay taxes to the Russian state before even being paid for their oil.
A source with one major Russian oil company said his company was prepared to deal with higher credit risks from buyers for the sake of having stable and rising oil exports.
“Last year, we were facing output cuts as marketing was bad. Now it’s alright — we have buyers, we have sales,” the source said.

Read more: Top shipper of Russian oil gets Indian cover as Western certifiers exit

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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