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Javier Blas

The Backdoor That Keeps Russian Oil Flowing Into Europe

European energy companies are finding workarounds to keep Russian crude flowing while placating public opinion

Royal Dutch Shell Plc's Russian Oil Lubricants Blending Plant
Photographer: Bloomberg/Bloomberg

When is a cargo of Russian diesel not a cargo of Russian diesel? The answer is when Shell Plc, the largest European oil company, turns it into what traders refer to as a Latvian blend.

The point is to market a barrel in which only 49.99% comes from Russia; in Shell’s eyes, as long as the other 50.01 percent is sourced elsewhere, the oil cargo isn’t technically of Russian origin.

The maneuver underpins a burgeoning and opaque market for blended Russian diesel and other refined petroleum products, one of the many that oil companies and commodity traders are using to keep Russian energy flowing into Europe while at the same time satisfying public opinion that demands an end to subsidizing Vladimir Putin’s war machine.