The commodity kings: have traders finally discovered a moral compass?

Many people around the world were glued to their screens in horror on 4 March, as they watched Russian shells raining down on Ukrainian cities. On a trading floor in central London, the oil traders at Shell were also glued to their screens – but watching the price of Russian oil. It was becoming a lot cheaper than normal (Brent) oil, due to the understandable reluctance to support Putin. But then again, everyone has their price.

The Shell traders watched, and waited, as every minute the price was lowered further– to a $23 a barrel discount, then a $24 discount, then a $25 discount. Finally, at around 4 p.m., the traders could no longer resist. They agreed to buy the Russian oil at $28.50 below the world oil price (then just over $118). They had picked up Putin’s oil for $20 million less than they’d normally pay for a cargo of 730,000 barrels.

It wasn’t the first time commodity traders had found an opportunity for profit in Vladimir Putin’s Russia. Not all traders work for high-profile companies or fear censure. Indeed, such commodity traders had probably done more to help Putin remain in power than anyone else in the international business community since the West imposed sanctions on Russia in 2014 over the annexation of Crimea. Few outside the natural resources industry even know their names. And yet, as their recent history in Russia demonstrates, they wield enormous influence in the modern world.

Take Glencore, the world’s largest commodity trading company. Five years ago, it stepped in to help the Russian state raise $11 billion, putting together a consortium with the Qatari sovereign wealth fund to buy a stake in its energy giant Rosneft. Putin was so appreciative that he personally awarded Ivan Glasenberg, the trading house’s then chief executive, a medal at a ceremony in the Kremlin.