Plus: London Metal Exchange, Interconnectivity, Interest Rates
This week, energy company Shell was forced to issue an unusual apology. Days after the invasion of Ukraine, the company took advantage of a huge discount in the price of Russian flagship crude to buy 725,000 barrels of oil. The company didn’t break the law and the deal was a profitable one, but it badly misjudged the zeitgeist.
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil…was not the right one and we are sorry.”
Less widely known is who Shell bought its oil from. The company didn’t buy it directly from Russia; rather, it came from an intermediary trading company, headquartered in Singapore, registered in Amsterdam, with roots in Geneva. That company is Trafigura and it ranks as one of the largest commodity trading firms in the world.
It’s not the first time Trafigura has slipped under the radar. In 2015, BNP Paribas was fined $8.9 billion by US authorities for sanctions violations. I’ve highlighted this fine a few times over the past couple …