But an opaque market is forming to hide the origin of this oil. Unlike before Russia invaded Ukraine, oil buyers are worried about the reputational risk of trading crude that funds a government Western leaders accuse of war crimes.

Oil from Russian ports is increasingly being shipped with an unknown destination. In April so far, more than 11.1 million barrels have been loaded into tankers without a planned route, more than in any country, according to TankerTrackers.com. It’s almost none before the invasion.

The use of the destination unknown tag is a sign that oil is being transported to larger vessels at sea and unloaded, analysts and traders said. The Russian crude is then mixed with the ship’s cargo, blurring its origin. This is an ancient practice that allowed exports from sanctioned countries such as Iran and Venezuela.

The ship Elandra Denali was off Gibraltar last week when it received three oil shipments from tankers sailing from the ports of Ust-Luga and Primorsk in Russia, according to the ship’s operators, those involved in the transshipment and two ship trackers. companies. The ship’s records show it departed from Incheon, South Korea, and plans to arrive in Rotterdam, a key refining port in the Netherlands.

New grades of refined products called Latvian melange and Turkmen melange are also on the market, according to traders, with the understanding that they contain substantial amounts of Russian oil, they said.

Oil sales for Russia are the lifeblood of the economy and government spending. The country struggled to sell oil at the same volumes and prices as before the war, causing backups in its domestic oil industry.

The United States, United Kingdom, Canada and Australia have banned imports of Russian oil. The EU is more dependent on Russian energy, importing 27% of its oil from the country. European leaders have also debated whether to impose an embargo, but have yet to act, as they balance a desire to isolate Russia without inflicting pain on their own economies through higher energy prices. students.

Despite the lack of sanctions, many European energy companies self-limited in the weeks following the invasion, as bank funding for trade dried up and insurance costs soared. . Russia’s oil exports fell in March, leading to higher domestic storage levels and lower production at some refineries.

The rise in shipments to Europe in April, as well as those marked without destination, indicate that some companies are finding workarounds.

“The European Union fully sanctioning Russian oil would be like saying tomorrow you cut your salary by 40% and you have to carry on living as if nothing had happened,” said Giovanni Staunovo, commodities analyst at UBS Group AG..

“In the meantime, there are huge Russian oil discounts in the market. Some will find this environment very attractive.

Traders say a popular grade of Russian crude known as Urals is between $20 and $30 below the Brent benchmark. Before the invasion, it was generally on par or a dollar or two below. Russia has made deals to sell oil to buyers in India.

Much of Russia’s oil is still marked with clear destinations on shipping documents. Barrels to Romania, Estonia, Greece and Bulgaria more than doubled this month compared to March averages. Volumes also increased sharply for the Netherlands, the leading buyer in Europe, and Finland.

Some buyers are rushing to do business in anticipation of potential new restrictions, while others say they are executing on deals made before the invasion. Sanctions would force them to break these contracts.

“The fact that they’re buying more than before the invasion suggests it’s not just because of long-term contracts,” said Simon Johnson, an MIT economics professor, oil geopolitics researcher and former economist. Chief at the International Monetary Fund. “It’s also a question of cheap energy. Until there is a full embargo, this can continue.

In recent weeks, oil majors and commodity trading companies, including Royal Dutch Shell PLC,

SHEL -0.18%

Repsol AG,

Exxon Mobil Corp., Eni SpA,

The Trafigura Group and the Vitol Group have chartered ships to transport crude oil from Russian oil terminals on the Black Sea and the Baltic Sea to ports in the European Union, according to Global Witness, a research and advocacy group working with the Ukrainian government, and data from Refinitiv. The shipments arrived in Italy, Spain and the Netherlands this month, according to the data.

A Repsol spokesman said shipments received recently are tied to long-term obligations incurred before the invasion. Shell, Exxon and Eni said they were transporting oil from Kazakhstan through a Russian port. Trafigura and Vitol did not immediately respond to requests for comment.

Shell said on April 7 that it would stop buying Russian oil on the spot market but was legally obligated to take delivery of crude due to contracts signed before the invasion. The company defines refined products as being of Russian origin if blends contain 50% or more, leaving the door open to trade in products such as diesel if it contains 49.9% Russian oil or less.

The Ukrainian government sent a letter to Shell CEO Ben van Beurden on April 13 in which he criticized the decision, saying that “the idea that any company will continue to finance Putin’s war machine through an accounting trick is deplorable”.

“It is a national disgrace for many governments and institutions that are financing these aggressions against us,” said Oleg Ustenko, economic adviser to the Ukrainian president.

A Shell spokesperson said the company’s “self-imposed restrictive measures go well beyond any European Union measures in place today”.

EU officials are drawing up a plan for a potential embargo, but the timing is still under consideration due to the upcoming French elections and Germany’s pushback. An embargo would probably only be implemented over time. Some worry that traders are already finding ways to keep the oil in circulation.

“Even if we see some sort of oil embargo from the EU, will they remember to sanction the tankers? More ship-to-ship transfers away from the coast is a reasonable expectation,” Mr Johnson said.

— Benoit Faucon contributed to this article.

Write to Anna Hirtenstein at [email protected]