Oil trading giant Vitol will not enter into any new Russian crude and product transactions as it moves forward with plans to stop trading Russian crude oil and products by the end of the year, Bloomberg has reported, citing a spokesman for the company.
The Dutch energy and commodities trading company will only handle cargoes for which contracts have already been signed.
Vitol said on Monday that it would exit the Russian oil markets by the end of the year. Its trade with Russian oil “will diminish significantly in the second quarter as current term contractual obligations decline,” a spokesman said, adding, “we anticipate this will be completed by end of 2022".
Reuters reported in March that Vitol has long-term contracts with Russian energy company Rosneft until at least October.
Vitol’s latest move brings it in line with other oil majors including Shell, TotalEnergies, Trafigura and Neste that have stopped buying Russian oil or have indicated they will do so by the end of 2022.
At the same time, a wider embargo against the Russian oil sector has taken hold as banks, traders, shippers and insurers shun it to avoid falling foul of increasingly stringent financial sanctions.
The International Energy Agency (IEA) estimated on Wednesday that supplies of Russian oil will drop by 1.5m barrels per day (bpd) in April, and could fall by as much as 3m bpd from May as buyers turn away.
Russian oil output was down by less than 1m bpd in early April, according to analyst estimates and Russian data.
The IEA cautioned that it based its assessment of exports on statements from several companies already announcing they would reduce or cut their purchases of Russian oil but noted increased interest in discounted barrels, notably in Asia, could provide an offset.
The IEA estimated that Russia about 4.7m bpd of crude oil in 2021, of which 2.4m bpd went to Europe.
But there are signs that the EU could be next to ditch Russian oil. Last week, European Commission President Ursula von der Leyen said the bloc was considering an oil embargo as part of a fresh round of sanctions.
However, given Europe’s dependence on Russian oil, critics have dismissed the ban as impractical and opinion between various EU member states remains divided.
Vitol, according to its website, traded 7.6m barrels of crude and other oil products every day during 2021. What percentage of that volume came from Russia is unclear.
The company, in a partnership with Mercantile & Maritime, holds a 5% stake in the Vostok Oil megaproject in Siberia that is being jointly developed by Rosneft that it is also looking at ways of exiting.
The Vostok project sits on oil fields that are estimated at 2.6bn tonnes of crude and is predicted to produce up to 100m tonnes of crude annually once it reaches full capacity.
