Bloomberg: Energy trading giants open to returning to Russia if sanctions lifted

Top energy trading giants have indicated that they would be open to returning to Russia for business if sanctions were fully lifted, though some expressed caution about the timeline for such a possibility.

“If sanctions are eased in a way that we can go back in, why wouldn’t we? It’s our job,” said Torbjörn Törnqvist, CEO of Gunvor Group, in a recent interview with Bloomberg. “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?”

Before the full-scale invasion of Ukraine, major Western commodity traders had substantial operations in Russia through long-term agreements with local producers and investments in significant projects. However, as a result of US, European, and UK sanctions targeting Russian exports, producers, traders, and banks, these companies have spent the past three years retracting from these contracts and stepping away from trading Russian oil and metals.

Speaking at the FT Commodities Global Summit in Switzerland, the heads of several major trading firms discussed the potential for returning to Russia if sanctions are lifted, particularly in the context of peace efforts, like those led by former US President Donald Trump. On March 25, the US announced that Russia and Ukraine had agreed to a ceasefire in the Black Sea, though the Kremlin emphasized that its participation would depend on certain preconditions, including the easing of sanctions.

“If the sanctions are lifted, we would go back to Russia and see if we have a role to play in the commodities sector,” said Marco Dunand, CEO of Mercuria Energy Group Ltd. “As a company, we are a bit more shy when it comes to sanctions, but if sanctions were lifted, we would absolutely consider whether we could bring value and go back.”

Executives acknowledged that the return of Russian commodities to global markets, particularly energy and metals, could drive prices lower. However, they also warned that the process of reaching a peace deal and the eventual return of Russian exports may take longer than anticipated.

Trafigura Group CEO Richard Holtum highlighted complications in returning to Russia, especially due to the large number of British employees within his company, if US sanctions were lifted but other restrictions remained. “You would need to see a wholesale winding back of all the sanctions before it’s something that could even be considered,” he said.

Russell Hardy, CEO of Vitol Group, also emphasized that his firm’s return would depend on the specific rules and regulations at the time, but he cautioned that the process of negotiating a ceasefire was “incredibly complex.” He added, “In reality, we do think it’s going to be a year or two, so there isn’t any anxiousness inside of the organization about being ready or preparing for it. But clearly, I could be wrong, and it could be quicker than anticipated.”

By Tamilla Hasanova