- Russian commodities traders are fleeing Switzerland for Dubai, Bloomberg reported.
- Switzerland has ramped up sanctions on trading certain commodities, so Russian energy giants and others are moving.
- Execs from Russia’s largest state-run oil firms have explored relocating or are in talks to relocate to Dubai.
Thanks to war-time sanctions in Switzerland, Russian commodities traders who normally work within Swiss territory are rushing to set up business operations in Dubai.
According to Bloomberg, Switzerland’s ramp-up of restrictions is making it increasingly difficult for commodities traders to use the country as a base to deal with Moscow. It has spurred an exodus to Dubai as traders leave the nation that has long been home to middlemen matching Russian producers and their buyers.
Per the report, Russia’s three largest oil producers are in talks for trading operations in Dubai, and several other companies have already made the move.
Dubai makes an attractive landing spot for commodities traders because it hosts an abundance of free-trade zones, has low taxes, and is close to Middle Eastern energy producers.
“Middle Eastern and Eastern jurisdictions will gain in importance relative to the rather euro-centric situation of the commodities business up to now,” Wouter Jacobs, the director of the Erasmus Commodity & Trade Center in Rotterdam, told Bloomberg.
The Swiss have claimed neutrality amid war in Ukraine. But in line with the European Union, they have imposed more and more strict parameters around certain commodities.
Sources told Bloomberg that execs from Russia’s state oil producer Rosneft explored the idea of business in Dubai last month, while officials from Gazprom have done the same.
Additionally, the sales and trading arm of Lukoil, another Russian energy giant, is eyeing a relocation to Dubai from Geneva. Solaris Commodities, a Russian grain trader, has already relocated to Dubai as of last week, per the report.
Meanwhile, the EU plans to have bans in place by the end of 2022 to stop insuring and financing Russian oil cargoes. Switzerland has said it will take the same measures.