(Oil Price) – Litasco, the international oil trading and shipping firm owned by Russian oil company Lukoil, is looking to rebuild its business in the Americas by arranging credit lines and distancing itself from Russian oil trades and its parent, sources close to Litasco have told Reuters.
Litasco and Lukoil have not been sanctioned by the United States as part of the wide-ranging sanctions on Russian energy companies. The U.S. and its Western allies are looking to stifle Vladimir Putin’s revenues from energy exports—Moscow’s single most important source of income for the budget.
Despite the fact that neither Switzerland-based Litasco, nor Lukoil are on a sanctions list, international credit lines to the trading firm have dried up to near zero, according to Reuters’s sources. Banks, insurers, and other stakeholders in the oil trading business have been avoiding doing deals with Litasco anyway, for fear of future sanctions on the company or Lukoil, and for concerns about image as many players have sought to distance themselves from trading in Russian oil and petroleum products.
Litasco is now looking to distance itself from its Russian parent Lukoil, the second-biggest oil producer in Russia after state-controlled Rosneft, one source told Reuters. Others added that Litasco operates independently of its parent company.
Litasco is now looking to rebuild its oil and fuel trading business in North, Central, South Americas and the Caribbean, one of the sources said.
All three sources told Reuters that Litasco’s U.S.-based unit, Lukoil Pan Americas, does not trade in oil cargoes of Russian origin.
Apart from distancing itself from dealing in Russian oil, Litasco has already secured over $2 billion in open credit lines which will support its trades, according to the sources.
These credit lines put “the company in a solid financial position to re-activate the business which was virtually dormant for the past two years,” one source told Reuters.
By Tsvetana Paraskova for Oilprice.com
