Why is the Biden administration helping Trafigura make money for a Kremlin kingpin?

Qthe US government is enabling a major commodity trader to funnel money back to Vladimir Putin’s inner circle.

This undermines US sanctions against Russia imposed over the war in Ukraine. It also limits the opportunity for US companies to establish alternate supply chains in the US and allied interests.


The company in question is Trafigura, a major multinational company based out of Singapore. As the Financial Times recently reported, the US government has sought to persuade Trafigura and other traders to move Russian oil without fear of sanctions.

On paper, Trafigura is an odd benefactor of choice for the Biden administration’s grace. The company has been involved in numerous scandals over the years. This includes a 2006 incident in which Trafigura chartered a vessel that then dumped toxic waste in the Ivory Coast. The Guardians later proved that Trafigura had sought to cover up its responsibility for the scandal, even pursuing a “superinjunction” to prevent media reporting on it.

Trafigura was most recently taken in a fraud scheme worth $580 million. Having bought what it claimed it believed to be nickel, Trafigura said it only discovered the fraud when it opened shipping containers and found them to hold far lower-value carbon steel instead. Trafigura is now taking legal action against the individual it blames for the fraud, but it is unclear how the company’s due diligence efforts failed so spectacularly. The firm recently announced that some of its senior leaders will be stepping down.

That said, Trafigura defines itself by its close relationship with the Russian energy and commodities sector (a statement by Trafigura to the Washington Examiner follows at the end of this article).

In a statement to the Washington Examinerthe US State Department did not specifically address Trafigura, but it said, “We are working diligently to ensure that our sanctions have the most impact on Russia, not others. The US does not currently have sanctions in place against Russian energy exports to other countries. We have taken steps to make it clear to commercial actors that the US Department of the Treasury has issued General License 8 authorizing energy-related transactions with sanctioned Russian banks, so those payments can continue. The US and our allies’ and partners’ sanctions and export controls are structured for long-term effects to weaken Russia’s position as a global energy producer and supplier in response to its ongoing war of aggression against Ukraine.”

How the State Department’s incentivizing of Russian oil flows supports a “long-term effort to weaken Russia’s position as a global energy producer” is unclear.

Regardless, as its competitors have distanced themselves from Russian investments in response to the war in Ukraine, Trafigura is steaming ahead with new business activities. Reports suggest that it was negotiating a multibillion-dollar deal to acquire aluminum from Russia’s Rusal company. Reports also indicate Trafigura very recently purchased large amounts of Russian copper from the London Metals Exchange.

But it is Russia’s supreme energy giant, Rosneft, that best explains Trafigura’s Moscow ties. Rosneft relied on the firm to raise funds during a 2015 debt crunch. Trafigura also provided pre-payments on purchases of Rosneft oil following Western sanctions introduced following Russia’s 2014 invasion of Ukraine. At the time, Rosneft CEO Igor Sechin observed that “with Trafigura, we have a very trustful relationship.” Trafigura sales since the start of Russia’s February 2022 war in Ukraine have benefited Rosneft’s portfolio.

Sechin is a very close ally of Putin, sanctioned by the United States, the United Kingdom, and the European Union. The US Justice Department issued a seizure order for his plane just last month. Sechin is regarded by Western intelligence services as a foundation for the corruption and often violent power jockeying that flows within Russia’s oil industry. A former deputy prime minister, Sechin has amassed immense wealth for himself by running Rosneft as a de facto dictatorship, dismissing anyone not deemed absolutely loyal and buying up assets. Sechin’s largesse sustains Putin’s power-patronage circles and those of senior security and intelligence service interests. Some analysts believe he is second only to Putin in power.

Speaking on the condition of anonymity, due to fears of violent reprisals, two energy sector sources and one Western security sector source told me that Trafigura is greasing Sechin’s largesse network by selling lucrative stakes in Russian energy enterprises to what appear to be shell companies in Sechin’s service.

These shell companies can then provide continuing purchases of Russian oil without the sensitivities that attach to Trafigura’s engagement on that count. The sources point to a March 21 Bloomberg report that notes, “Nord Axis Ltd., which bought 521,000 barrels a day of Russian oil in December, all from Rosneft PJSC. Nord Axis, which was incorporated in February last year in Hong Kong, was unknown in the oil market until July, when it was announced as the buyer of Trafigura’s stake in Rosneft’s flagship oil project, Vostok Oil.”

The two energy sources told me that Sechin benefits directly from these transactions via connections to Nord Axis’s ultimate ownership. As the Financial Times underlines, and the Washington Examiner can confirm, Nord Axis’s ownership is extraordinarily murky and its corporate officers remain largely hidden from public view.

Still, Trafigura’s closeness to Sechin is hardly debatable. CEO Jeremy Weir has met Sechin on numerous occasions. In June 2021, Weir praised the Vostok Oil project, of which his firm then, shortly thereafter, sold a significant stake to Nord Axis. Weir said Trafigura was “proud and honored” to be part of what he described as a project of “colossal importance.” One energy sector source said that Moscow-based Trafigura executive Jonathan Kollek is the firm’s long-standing interlocutor for its dealings with Sechin. Kollek was named as a benefactor of the 2015 “Swiss Leaks” scandal in which HSBC bank was alleged to have helped wealthy clients evade taxes. Kollek was purportedly linked to accounts worth a total of $72 million.

The question stands: Why is the Biden administration happy to engage with a firm that seems determined to provide service to the Kremlin elite? To facilitate this energy activity while restricting domestic energy extraction does not appear to be in the US’s national interest — nor, for that matter, in the interest of US foreign policy priorities such as supporting Ukraine.


This article has been updated to include a post-publication statement from the State Department.

The following is a statement from Trafigura in response to questions presented by the Washington Examiner in relation to this story:

“As we made clear in an announcement issued on 2 March 2022 (see here) and in subsequent public statements, Trafigura unconditionally condemns the war, the violence in Ukraine and the humanitarian crisis this is causing. Trafigura does not operate any assets in Russia and we have no directors or corporate officers in any external Russian entity. We are taking every precaution to ensure we comply in full with applicable regulations and sanctions. Importantly, we are regularly engaging with governments and our customers to understand their requirements and provide the commodities and energy they need in severely disrupted commodities markets. Trafigura’s passive, minority, non-operational 10% stake in the Vostok Oil project was acquired in late December 2020. We afterward announced the exit of our investment in Vostok Oil on 13 July 2022 — see here The purchaser, Nord Axis, is an independent, Hong-Kong registered trading company with no connection to Trafigura and is not Russian-owned. We terminated all long-term offtake contracts for crude oil and petroleum products with state-owned Russian producers in advance of European sanctions coming into effect in May 2022. Since then, we have not purchased Russian-origin crude oil and any purchases of Russian- origin petroleum products for customers in permitted destinations have been made in compliance with applicable sanctions, including the price cap.

In January 2023, we announced the completion of the sale of our 24.5% indirect minority interest in downstream energy and petrochemicals company Nayara Energy Limited to Hara Capital Sarl — see here.”