Exclusive: Trafigura set to boost its dominance in Urals – sources

By Olga Yagova, Dmitry Zhdannikov and Gleb Gorodyankin

MOSCOW/LONDON (Reuters) – Oil trader Trafigura will regain its position as the largest buyer of seaborne crude from Russia’s Rosneft, trading sources told Reuters on Friday, expanding their partnership as Rosneft reduces its dealings with Vitol and Glencore (LON:).

Three sources told Reuters that Trafigura would increase its dominance in Rosneft’s Urals oil trading from April when Rosneft’s 5-year pre-finance deal with Vitol and Glencore expires.

“Trafigura will be the lucky one,” a trader in the Russian market said.

Rosneft, Trafigura, Glencore and Vitol all declined to comment.

Trafigura was the biggest lifter of Rosneft crude for a couple of years from 2014, when the companies established a close partnership amid Western sanctions on Moscow.

Rosneft’s boss Igor Sechin is a close ally of President Vladimir Putin and the West imposed sanctions on the Kremlin to retaliate against Russia’s annexation of Crimea.

But Trafigura lost a large portion of volumes at the start of this year when Rosneft transferred volumes it was previously getting in the Pacific to its new shareholder, China’s CEFC.

From April, Trafigura will be able to recoup the volumes lost in the Pacific by getting more Urals crude on the Baltic. It will see volumes rising to 10 cargoes in April from Russian Baltic ports from five in previous months, according to traders.

The development became possible because March was the last month of Rosneft’s supplies to Vitol and Glencore under a pre-finance deal signed in 2013, shortly before Western sanctions against Moscow were imposed.

From April onwards, Rosneft will have some 700,000 tonnes, or seven cargoes, a month of Urals volumes available for sale and most of it will go to Trafigura, the sources said.

The development means Vitol, once the biggest buyer of Rosneft’s oil, will disappear from the list of regular buyers of Rosneft’s crude as it doesn’t have new pre-finance deals.

Glencore will remain a large buyer as it secured a long-term supply deal last year when it became a shareholder in Rosneft.

Sharp increases in Urals supplies from Rosneft could make Trafigura the biggest market player in the Baltic Urals market from next month, Reuters data showed.

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