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European countries can continue to buy Russian goods from other third countries without being aware of their origin.
Oil can usually be traced to its origin based on its chemical composition, such as sulfur content and density. However, some buyers have been deceived in the past by forged documents, hiding the origin of shipments from countries under sanctions, including Iran and Venezuela, based on industry sources.
This becomes more difficult if crude oil is mixed with other crude materials for refineries and almost impossible after being processed into standard products, such as gasoline, diesel or jet fuel.
Who is demanding the suspension and who the ban in stages of Russian oil?
At least 26 major European refineries and trading companies have suspended purchases or aim to phase out 2.1 million barrels a day of Russian imports, according to JP Morgan.
European companies, including Shell, TotalEnergies, Repsol and BP (British Petroleum), no longer buy any refined products with Russian content.
According to documents seen by Reuters, some transport companies are also seeking guarantees that the cargo is not of Russian origin or interest and has not been transferred from a Russian-linked ship.
Why is it so difficult to trace Russian goods?
Despite all the documents, there is no guarantee of eliminating any trace of Russian hydrocarbons once they enter the EU’s main oil import hub, the Amsterdam-Rotterdam-Antwerp (ARA) complex – which consists of eight stretched ports. in two places.
There are 96 terminals and 6,300 storage tanks owned by hundreds of international oil companies.
“Some products processed in European refineries will continue to contain Russian oil,” says Shell. “At the same time, many products like oil are usually mixed – which means that some of the mixed liquids in pipelines and tanks that feed the entire industry will originate in Russia.”
Cuneyt Kazokoglu, an official in charge of analyzing oil demand, said that at ARA, Russian blended oil could appear in customs data simply as fuel from the Netherlands.
“I think many European countries will cite imports from the ‘Netherlands’ to hide the origin of Russian products,” Kazokoglu said.
Where does ARA oil go?
Fuel can be transported in consignments and re-exported to other regions and countries. It can go by barge to other terminals within the same port, or go down the Rhine to Switzerland, France and Germany. This could obscure the origin of the fuel, traders said.
From the ARA headquarters, oil products can be delivered through NATO’s Central European Pipeline System (CEPS), which connects to six seaports and 11 refineries across the continent, three railway stations, 16 for loading of trucks and six international airports.
“If it is not a Russian owner, then in addition to the certificate of origin – but even this can be changed – it is difficult for the terminal (storage) to identify the origin of the products,” said Krien van Beek, an intermediary at ODIN-RVB Tank, Storage Solutions in Rotterdam.
What are companies doing during their operation?
Buyers are increasingly looking for breakdowns on the origin of blended oil from storage locations to make their decision on whether they can accept it. But fully traceable origin documentation is not always available within a reasonable timeframe before an agreement can be reached.
Some ship tenants offer a certificate that details where the fuel was produced or processed. While the customs authority of a country would have access to that data with imported consignments, the documents are considered confidential.
Shell previously classified goods of Russian origin as those with 50 percent or more of their content from fuel produced in Russia.
But the company recently tightened its restrictions on Russian oil purchases, saying it would no longer accept refined products with Russian content, including blended fuels, under the clauses in its trade contracts.
The restriction, however, only applies to platforms where companies are allowed to enter their clauses and would exclude the oil contract on the main ICE stock exchange, said a source well aware of the situation.
Some other traders continue to assess whether an oil mixture, for example, containing up to 49 percent Russian oil, would be considered a non-Russian product, three trade sources told Reuters.
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