Russian Oil Moving to Asia on Older Vessels: Trafigura CEO

The global oil market has witnessed the mushrooming of smaller trading firms who are moving Russian oil much longer distances to regions like Asia in older ships, potentially raising the risk of shipping errors and accidents, according to Trafigura CEO Jeremy Weir.

• "A lot of new companies are being established or smaller companies are growing significantly. We are seeing that all the vessels that typically should have been scrapped are being acquired and are used to transport these fuels. Quite frankly, that's not acceptable in today's world," Weir said.
• "And the problem is when oil is going much greater distances -- historically the Russian barrel went to Europe and now they are going to India and China -- it means much more oil on the water. You have got heightened risk of accidents occurring. It's a concern ultimately," he added.
• On the current market Weir said - "Our turnover is very large but margins are very thin. It's not that we are seeing an explosion of margins. Margins are slightly higher but not available for everyone to capture. You need high amounts of capital to buffer these highly volatile markets."
• "I don't believe we will revert back to the old system. There are other factors -- not just the war -- which has led to the current fragmented environment at the moment. People are recognizing that security of resources is extremely relevant. As a result, we can going to see more regionalization," he added.