Vitol Group, the world’s top independent oil merchant, will stop trading Russian crude oil by the end of the year, according to CNN. The Dutch energy and commodities trading company will also ban any new Russian crude transactions.
Since Russia invaded Ukraine, the U.S., United Kingdom, Canada and Australia stopped trading Russian oil. Other countries and even major Western companies also joined the sanctions, however the strategy might not be effective in the short term.
The Organization of the Petroleum Exporting Countries (OPEC) warned earlier this week the European Union that potential sanctions could create one of the greatest deficits in oil supplies, and that it would be almost impossible to replace the Russian oil imports.
In 2019, the top exporters of crude oil were Saudi Arabia ($145bn), Russia ($123bn), Iraq ($73.8bn), Canada ($67.8bn), and the U.S. ($61.9bn), according to OEC data.
Russian President Vladimir Putin warned also this week that European countries switching away from Russian oil imports “will inevitably affect the entire global economy.”
President Putin knows replacing Russian oil won’t be easy. Russia is the world’s second-largest crude oil exporter and accounted for 14% of global supply last year.
As Russian oil is rejected in markets, its benchmark Urals crude is now $34 a barrel less than the European benchmark Brent.