Exclusive: Vitol trades Iranian fuel oil, skirting sanctions

Wed Sep 26, 2012 1:16am EDT
 
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By Luke Pachymuthu, Randy Fabi and Chen Aizhu

SINGAPORE/BEIJING (Reuters) - Vitol, the world's largest oil trader, is buying and selling Iranian fuel oil, undermining Western efforts to choke the flow of petrodollars to Tehran and put pressure on Iran's suspected nuclear weapons program.

Vitol last month bought 2 million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders, Reuters established in interviews with 10 oil trading, industry and shipping sources in Southeast Asia, China and the Middle East. A spokesman for Vitol declined to comment.

Swiss-based Vitol is not obliged to comply with a ban imposed in July by the European Union on trading oil with Iran because Switzerland decided not to match EU and U.S. sanctions against Tehran.

The company earlier in the year stopped trading Iranian crude oil from its main European offices before the July 1 EU embargo deadline. But the trading sources said it has continued to deal in Iranian fuel oil from the Middle East.

The tale of the cargo of Iranian fuel oil involves tanker tracking systems being switched off, two ship-to-ship transfers, and blending of the oil with fuel from another source to alter the cargo's physical specification.

Privately-held Vitol SA is led by its long-time CEO Ian Taylor, a Briton. Taylor was among leading donors to Britain's ruling Conservative Party named in March by the Prime Minister's office as having dined with David Cameron at his private apartment in Downing Street amid the fall-out from a "cash for access" party funding scandal. Britain is a vociferous critic of Tehran's nuclear program and a leading advocate of the EU sanctions.

SWISS LOOPHOLE

Vitol has said previously it is in compliance with sanctions against Iran, but has declined to say whether or not it would follow the strict EU regulations rather than Switzerland's.   Continued...

 
A sign is pictured in front of Vitol Group trading commodities company building in Geneva in this October 4, 2011 file photo. REUTERS/Denis Balibouse/Files