Russia began selling oil through shell companies

 Tightening American sanctions is forcing Russia to play cat and mouse. Oil supplies to India, which were hit hardest by Washington's restrictions on the Russian shadow fleet, have been taken over by new, unknown companies in recent months, Bloomberg writes, citing traders in the Asian region and representatives of Indian oil refining companies.

For example, according to them, in January-February, large volumes for private and public Indian refineries were transported by three previously unknown firms - Blackford, Black Pearl and Vertex. It is unlikely that they will last long - most likely, several months, industry participants believe.

Carriers are taking advantage of the ease of registering new businesses in cities such as Dubai and Hong Kong. Another advantage of smaller firms is that they are easy to replace, with many lasting less than a year, said Victor Katona, lead crude oil market analyst at Kpler.

This is a real headache for regulators. The United States has already imposed sanctions against several dozen tankers and a number of large shipowners. They stopped delivering oil, but this did not stop Russia from increasing exports in mid-April to the maximum in the last 11 months. Supply volumes in the second week of the month amounted to 3.95 million barrels per day; and the average over the past four weeks, which smooths out volatility, rose to its highest since early June 2023, amounting to 3.66 million barrels.

Managers at Indian refineries told Bloomberg they are being inundated with applications to register new firms as their suppliers. Moreover, a check of the documents shows that these companies are real and, if approved, they actually begin to deliver oil. As can be seen from the inspection, these companies are backed by people who were previously involved in exports from Russia to India.

“Everyone is playing hide and seek because no one wants to get caught for violating sanctions,” says Jayendu Krishna, deputy director of shipping consultancy Drewry Maritime Advisors. India needs cheap oil, and middlemen provide it, Krishna notes.