Russia Uses Little-Known Traders to Sell Oil to the World

Russia struck deals to sell a substantial portion of its petroleum output to a group of previously little-known oil traders, locking in a stream of cash from its lifeblood industry.

State-controlled energy giant Rosneft Oil in recent weeks wrapped up one of its largest tenders in years, people familiar with the sale said. A tender is a type of auction in which traders bid for the right to export oil in the future. In this case, the contracts are for up to 12 months and involve crude and refined products, some of the people said.

It couldn’t be learned the exact amounts of oil sold, nor the prices. But the success of the tender—a similar effort last year failed—adds to signs that the financial squeeze on Russian oil producers from sanctions is abating. The price of Russia’s main variety of crude has risen above a Western-imposed cap in recent weeks.

A Rosneft spokesperson said that the company doesn’t comment on the details of its business activities and that some of what was presented in a series of questions about the tender was incorrect. When asked which details were inaccurate, the spokesperson didn’t reply.

The results cement the role of a clutch of upstart trading houses as vehicles for Russian oil to reach new markets. These companies rose to prominence after Russia’s invasion of Ukraine, filling a hole left when the world’s largest commodities merchants—such as Trafigura Group, Vitol and Glencore —pulled back from Russia.

Among the biggest winners in the tender was Bellatrix Energy, the people familiar with the sale said. According to registration documents, the company was incorporated in Hong Kong. Also taking large volumes of Russian petroleum were trading group Amur and Tejarinaft, both registered in the United Arab Emirates.

All three have been active exporters of crude and refined products since sanctions on Russian oil took effect in December, according to Russian customs data and industry executives.

Bellatrix didn’t respond to requests for comment. Representatives for Amur entities involved in oil trading in the U.A.E. couldn’t be reached to comment. A representative for Amur entities in Switzerland declined to comment. Emails sent to an address listed on Tejarinaft’s website bounced back. 

The traders perform a vital role for Rosneft and other Russian producers, handling the complex logistics needed to move millions of barrels of petroleum daily to overseas buyers. They have, according to shipping records and the industry executives, worked closely with other upstart firms, based in the U.A.E. and India, that have amassed control of hundreds of old tankers used to move Russian oil.

Trading, shipping and refining Russian oil became a lucrative business in the wake of the Ukraine invasion in February 2022. The price dropped to steep discounts to global benchmarks—discounts that remain wide by prewar standards even after narrowing in recent months. Western governments monitor oil flows to gauge whether sanctions have succeeded in hurting Russia’s wartime economy, and to spot any violations.

The U.S., Europe and other backers of Kyiv targeted Russian energy in several rounds of sanctions. They designed the measures to ensure a continued flow of Russian oil onto world markets so as not to drive up gasoline prices, but also to throw sand in the gears of Russia’s export logistics and limit how much Moscow can earn from each barrel it sells.

Russia’s favored trading and shipping players have little public profile. That makes it hard to determine how money flows through the oil market and whether it works its way back to the Russian budget. The paper trail left in publicly available documents doesn’t fully show who ultimately controls them and backs them financially, according to industry executives.

Amur and Tejarinaft entities based in the U.A.E. share the same managing director, Hicham Fizazi, a Moroccan national, Emirati corporate records show. An engineer by training, Fizazi previously traded wheat and invested in affordable housing, according to Tejarinaft’s website. Fizazi was named as chairman of an Amur holding company in Geneva in minutes of a shareholders’ meeting reviewed by The Wall Street Journal dated December last year.

Fizazi couldn’t be reached to comment.

The Geneva company was set up in 2021 by trading giant Vitol and midsize merchant Mercantile & Maritime Group. The joint venture traded Russian oil and invested in a major Russian development project known as Vostok Oil.

Vitol sold its stake in the Swiss Amur holding company to Emirati firm Fossil Trading FZCO after the invasion of Ukraine, a spokeswoman said. She added that Vitol has no stakes in Amur entities in the U.A.E.

Mercantile & Maritime sold its Vostok stake, according to the company’s website. It divested from Amur Trading and Amur Investments in Switzerland and has no stakes in the U. A. E entities, a person familiar with the matter said.

Fossil Trading didn’t respond to requests for comment.

Until recently, records showed that Tejarinaft’s website registrant was Edward Ghazal, previously a commercial manager at Mercantile & Maritime’s Singapore office, according to his LinkedIn profile. In 2020, he was also a director at Myanmar Petroleum Services, which is majority owned by Mercantile & Maritime, corporate filings showed. This week, the registrant changed to Fizazi.

Ghazal didn’t respond to requests for comment.

Bellatrix’s director is Ahmet Songan, a Turkish national. He couldn’t be reached to comment. 

Bellatrix has exported almost 25 million metric tons in crude and fuel this year from Rosneft and other Russian producers, including a subsidiary of state giant Gazprom, according to the customs data. In December, Bellatrix took out a loan facility with state-owned Russian Agricultural Bank of up to $350 million, to be repaid by mid-2025, according to a filing in Hong Kong.

Bellatrix borrowed from lenders including Russian Regional Development Bank, a subsidiary of Rosneft, a Hong Kong filing shows. As security, it pledged a contract for exporting oil products from India’s Nayara Energy, which had been transferred to Bellatrix by U.A.E.-based trader Coral Energy. Bellatrix also pledged a separate contract for selling oil products to Coral.

Russian Agricultural Bank and Russian Regional Development Bank are both sanctioned by the U.S.

Representatives for Russian Agricultural Bank, Russian Regional Development Bank, Gazprom and Nayara didn’t respond to requests for comment.

Another trader, Nord Axis, exported more than 50 million metric tons of crude and fuel this year through the end of May, according to Russian customs data. It was incorporated in Hong Kong nine days before the invasion of Ukraine.

Murat Sayin, founding partner of energy-focused Sayin Law & Consulting in Turkey and Nord Axis’s director, said that the contracts under which the company traded Russian oil had expired and that Nord Axis didn’t participate in the recent tender. Nord Axis hasn’t entered into any new contracts for Russian oil because of logistical complications and rising competition in the market, he said.

Write to Anna Hirtenstein at [email protected], Costas Paris at [email protected] and Joe Wallace at [email protected]