Big western commodity traders had significant businesses in Russia before the full-scale invasion of Ukraine. — Bloomberg
LONDON: The heads of some of the world’s top energy traders say they would be open to returning to Russia for business if sanctions were fully lifted, although some expressed caution about the prospect happening any time soon.
“If sanctions are eased in a way that we can go back in, why wouldn’t we? It’s our job.” Gunvor Group chief executive officer (CEO) Torbjorn Tornqvist said.
“We don’t do anything today because we think even though there are some gray zones, we just don’t do it. But if these are removed, why wouldn’t we?”
Big western commodity traders had significant businesses in Russia before the full-scale invasion of Ukraine, through long-term deals with domestic producers and investments in key projects.
The firms have spent the past three years pulling back from many of those contracts and partnerships, and largely stepped back from trading Russian oil and metals, as the United States, Europe and the United Kingdom targeted Russian exports, producers, traders and banks with sanctions.
The comments at the FT Commodities Global Summit in Switzerland showed how the industry was thinking Donald Trump’s efforts to end the war.
On Tuesday, the United States said Russia and Ukraine agreed to a ceasefire in the Black Sea, even as the Kremlin said its involvement would depend on a series of preconditions including sanctions relief.
“If the sanctions are lifted we would go back to Russia and see if we have a role to play in the commodities sector,” Mercuria Energy Group Ltd CEO Marco Dunand said.
“As a company we are bit more shy when it comes to sanctions, but if sanctions were lifted we would absolutely consider if we could bring value and go back.”
In markets from gas to aluminium, investors have been gaming out the possibility of a ramp up of Russian flows to Europe that could cause prices to drop sharply.
But trading house executives warned both the process of reaching a peace deal, and the return of Russian commodities, could take longer than anticipated.
Trafigura Group CEO Richard Holtum said his company’s large cohort of British employees would complicate a return if US sanctions were lifted while other restrictions remained. — Bloomberg
