Traders Reluctant to Buy Russian Oil Under Cap

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The big Western trading companies are unlikely to start buying Russian crude oil under the $60 per barrel price cap that was introduced by the G7 last December, despite encouragement from the US government to do so. That is the view shared by multiple trading sources who have been involved with Russia for well over 20 years and are themselves looking to resume purchases. They say the likes of Vitol, Trafigura and Gunvor, who used to be major offtakers of Russian crude and products before slashing their purchases after the invasion of Ukraine in late February, will not want to jeopardize their long-term relationship with Moscow by buying oil under the cap, which Russian President Vladimir Putin sees as a US-led conspiracy. Another trader says these companies would also risk losing their multi-billion dollar credit lines with Western banks, which are reluctant to touch any Russian business at all due to mounting sanctions. Their belief is that little-known companies, registered mostly in Dubai, will continue to buy up Russian barrels, using non-Western tankers.

Oil Trade, Crude Oil, Ukraine Crisis, Oil Products, Sanctions
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