Business | Schumpeter

How Europe’s commodities traders took a gamble too far on Putin’s regime

This is one war they may not be able to win

IN RUSSIA’S FROZEN north is a megaproject that has long been seen as an answer to President Vladimir Putin’s prayers. By the mid-2020s the Vostok oilfield is expected to supply about 15% of Russia’s crude exports. By that time Rosneft, the Russian oil giant leading the effort, plans to ship Vostok oil via the Northern Sea Route, a shortcut through the Arctic to Asia. The route will enable Russia to bypass the West geopolitically as well as geographically, allowing oil to travel along waters beyond the control of the American navy and out of reach of Western sanctions. Besides Rosneft, its backers include two mostly European oil and gas traders, Trafigura and Vitol. For years they have competed fiercely to be among the biggest buyers of Russian crude.

This article appeared in the Business section of the print edition under the headline “A gamble too far”

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