The world’s top oil trading firms have changed almost beyond recognition over the past few years as they move away from pure oil trading, focus on new areas like LNG and renewables, and build up portfolios of hard assets. This rapid expansion, financed by a steady flow of credit from international banks, has forced these merchant traders - whose calling card was once their willingness to chase profits by accepting risks others would not - to keep out of areas that could threaten their more conventional empires (PIW Nov.5’18). A decade or so ago, the trading houses would have relished the opportunity of finding a way around US sanctions on Iran or Venezuela, but now the risks of getting caught are just too great (PIW Feb.15’19). “The big players don’t do this kind of thing anymore, there’s far too much for them to lose,” a veteran trader says. Since the US imposed new sanctions on Iran’s oil trade last November, the major traders have all stayed away, and even smaller houses are absent. The likes of Vitol, Glencore and Trafigura all have assets in the US that could be frozen if Washington believed sanctions were violated, and billions of dollars in credit lines from international banks could be targeted. “One minor indiscretion could land you in a world of pain,” a Dubai-based trader focused on Iran tells Energy Intelligence. The only traders willing to take a risk on Iran are those lacking assets that could be seized and using non-dollar currencies such as the yuan or rupee.
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