OIL: Rosneft and Lukoil Use of Intermediaries on the Rise

Russian producers, Rosneft and Lukoil, are working much harder to get around US sanctions and are even more reliant on arms-length intermediaries, such as in the UAE, Energy Intelligence said.

• Since the new US restrictions, the proportion of Russia’s crude and products handled by intermediaries appears to have risen from over 50% to well above 75%. At least 20 such entities are currently active, according to Energy Intelligence estimates.
• “Russia can always find new ways to beat sanctions, but each time it’s costing them more money,” a trader said.
• New players have emerged on the Russian oil export scene in recent weeks. The IEA said MorExport, RusExport and NNK have been operating since May, handling around 1mb/d on Russian oil.
• Most Russian crude shipments are transported by the “shadow fleet” of vessels, but Greek-owned ships still play a role dealing with supplies from non-sanctioned entities.
• All Greek tankers are covered by the London-based protection so must abide by the EU price cap for Russian crude at $47.60/bbl for standard Urals. Urals is currently trading well below that level.