an February 24 America marked the anniversary of Vladimir Putin’s invasion of Ukraine by freezing the assets of dozens of other Russian banks. Britain and European Union He also lengthened their blacklists. Part of the reason for tightening sanctions again is to fill in the loopholes in the current system: America is going after “targets linked to evasion.” Europe undertakes to punish the “disloyal” Ukrainians. Previously joint research The Economist And SourceMaterial, an investigative organization, reports that Russia’s sanctions evasion is becoming more advanced — especially when it comes to the oil flogging that funds Putin’s war.
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A month ago, Europe imposed a ban on the import of refined Russian oil, having already banned purchases of crude oil in the country. To keep global supplies flowing while limiting Putin’s revenue, the European Union Its shippers, insurance companies and affiliated banks are allowed to continue facilitating Russian exports to other countries as long as the oil is sold below the price it has set. g7 group of large economies. But Russia’s oil did not turn out to be the bargain it had hoped. Most countries outside the West did not impose their own sanctions, allowing an army of shady middlemen to emerge outside the reach of Western actions. Our investigation sheds light on a missing piece of the puzzle: how their trade is financed.
Take Bellatrix, the once little-known trader whose shipping data indicates he now controls seven tankers capable of carrying 3 million barrels. The company did not respond to our questions, but its tax return file in Hong Kong, where it is headquartered, shows that its ownership was transferred to Bilal Aliyev, an Azerbaijani citizen, six weeks after the war. The data indicates that it has been involved in at least 22 trading of Russian oil products since Jan. 1. It bought on all occasions but three barrels from Rosneft, Russia’s state-owned oil giant. Where did you find the money?
The paper trail provides clues. A file in Hong Kong shows that the Agricultural Bank of Russia, a state-owned bank, agreed to facilitate a loan of up to $350 million to Bellatrix on December 30, to be repaid by May 2025. This is despite Victoria Abramchenko, Russia’s deputy prime minister, said on the 22nd. Last December, he said that sanctions should be lifted on the bank to facilitate food supplies, adding, “We, for our part, ensure that only the commodities that pass through this bank are mineral fertilizers.” Another filing, dated December 27, shows Bellatrix signed into a loan facility with Russia’s Regional Development Bank, a subsidiary of Rosneft.
Until recently, a large portion of Russia’s oil exports appeared to be financed through open credit by the Russian government, with traders paying for goods once they collected the proceeds themselves. Our findings indicate that trade is becoming more institutionalized. Many anonymous traders seem to be taking advantage of Russian banks on behalf of buyers further down the chain. Bellatrix herself appears to have a close working relationship with Coral Energy, a Dubai-based trader owned by another Azerbaijani businessman. A filing dated December 28th states that Bellatrix has a prepayment and pull agreement with the Nayara refinery in India (49% owned by Rosneft) which it has assigned to Coral.
Can the West do much to stem the flow of gray finance? Some explain America’s decision to blacklist MTS, a Russian bank, just days after Abu Dhabi granted it a license, as a sign that it may apply more pressure soon. But still, the demand for Russian fuel is high. Imports of independent refiners in China jumped 180% last month. Heavy fuel shipments to Fujairah port in The United Arab Emiratesbreaking records thanks to soaring Russian exports.
Some Russian crude even finds its way back to Europe once refined. Global Witness, an advocacy group, claims that Western energy companies and traders, such as Shell and Vitol, ship some to the bloc, often from Turkey. The companies rightly said that such trade is not illegal. Our investigation indicates that, earlier in the supply chain, the mechanisms of Russia’s oil trade are increasingly lubricated with Kremlin money. ■
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