Glencore vows no new Russian contracts

Swiss commodities trader Glencore announced on March 30 it would not enter into any new trading business for Russian commodities in light of Moscow's war in Ukraine, but it said it would honour its existing contracts.

"Glencore will not enter into any new trading business in respect of Russian origin commodities unless directed by the relevant government authorities," the company said in a statement. "Glencore will continue to honour its legal obligations under pre-existing contracts, subject to meeting all applicable sanctions in accordance with our sanctions policy and where it is feasible and safe to perform these contracts."

Glencore stands apart from the other main trading houses in committing to no new trading business for Russian commodities. Others like Gunvor, Vitol and Trafigura have taken no such steps, although the latter has said it is reviewing its purchase of a 10% stake in Rosneft's Vostok Oil megaproject in the Russian Arctic.

Glencore also said it would not divest its 10.55% stake in Russian aluminium and hydropower producer En+, nor its 0.55% interest in the country's largest oil company, state-owned Rosneft, after concluding that "there is no realistic way to exit these stakes in the current environment." It noted it had no board or management representation at either company.

Glencore was planning to scale back in Russia even before the country began its invasion of Ukraine in late February. On February 15, it revealed it was divesting its interest in mid-sized Russian oil producer Russneft, without revealing who the buyer was. The company's five-year supply deal with Rosneft expired in 2021, although prior to the war it was still taking part in regular tenders for Russian oil.

In June 2021, Glencore signed a heads of agreement to receive more than 0.5mn metric tons/year of LNG from Novatek's Arctic LNG-2 project in the Russian Arctic, which is due on stream in 2023.