London Daily

Focus on the big picture.
Monday, Oct 20, 2025

Russian commodities traders replace Switzerland with Dubai

Russian commodities traders replace Switzerland with Dubai

Ratcheting up of sanctions is promoting a migration of Russian businesses to Dubai as it becomes tougher to do business in Switzerland.

Traders of Russian commodities are rushing to set up businesses in Dubai as Switzerland makes it increasingly challenging for them to deal with Moscow.

Switzerland has for decades been home to middlemen helping to match Russian producers with buyers all over the world. Now, a ratcheting up of sanctions is prompting a migration to the emirate in the Persian Gulf.

Russia’s three largest oil producers are in the process of evaluating Dubai for trading operations, and several other firms have already relocated there. For Switzerland, some kind of exodus appears inevitable after the country followed European Union bans targeting exports from Russia.

“The trade will go on,” said Wouter Jacobs, director of the Erasmus Commodity & Trade Center at Erasmus University in Rotterdam. “Middle Eastern and Eastern jurisdictions will gain in importance relative to the rather euro-centric situation of the commodities business up to now.”

Progressively restrictive sanctions have made trading difficult for Russia’s state-owned firms, including those transporting the country’s commodities. Unofficial self-sanctioning has also been an issue — banks have pulled credit lines crucial for financing deals, while shipping companies and insurers are also cutting off their services.

That’s created an opening for Dubai, which has steered clear of imposing sanctions on Russian individuals and entities — intensifying the competition Switzerland already faces as a nerve center of global commodities trading.


Swiss Sanctions


While Switzerland claims neutrality and won’t allow its weapons to be taken to the conflict zone, it has followed the EU in imposing increasingly stringent restrictions on some commodities, banks and individuals deemed close to the Kremlin.

By the end of 2022, the EU will have restrictions in place banning the insurance and financing of transporting Russian oil to countries outside of the bloc and Switzerland has said it will do likewise.

“The Federal Council announced it will do exactly the same and so this is part of it,” a spokesperson for Switzerland’s State Secretariat for Economic Affairs — or SECO — said by phone. “It’s really the same, we take all the ordinance of the European Union into Swiss law.”

If fully enacted, that’s likely to make dealing with Russian oil more difficult and adds to Switzerland’s outright ban on brokerage, sales and providing financial services on Russian coal that was announced in April. But the regulations will also contribute to some businesses moving elsewhere.

“A trade between Russia and China for energy may normally have been done by a commodity house in Switzerland, with financial support from a banker in London – who wants to do that now?” Jacobs said. “It’s likely outfits that do will necessarily move to a new jurisdiction.”


Companies Moving


Executives from Russia’s state oil producer Rosneft PJSC have last month jetted into Dubai to explore the idea of a trading venture. Meantime, Gazprom Neft PJSC, Russia’s third-largest oil producer, is also looking to expand its presence in the city, people familiar with the matter said.

Litasco SA, the sales and trading arm of Russian energy giant Lukoil PJSC, is looking to relocate some Russian trading and operations staff to Dubai from Geneva in anticipation of making that the new central hub of the company and expanding on a small number of traders already there. Lukoil is Russia’s second-largest oil producer.

Another Geneva stalwart — Solaris Commodities, a trader of Russian grain, opened an office in Dubai last week, according to a person familiar with the matter, who asked not to be named because the information is private.

While sanctions don’t include agricultural products, the trader has found it harder to get access to financing as Swiss banks are shying away from Russian commodities — whether they incur penalties or not, the person said.

And there’s also a hit to the financing of commodity traders as Russian banks had stepped in to lend to the business as lenders including BNP Paribas and ABN Amro retrenched or pulled out of the sector altogether. Sberbank, which was recently added to the list of sanctioned entities, saw its commodity trade finance business in Switzerland double in volume last year, with money flowing mainly to the petrochemicals, metals, grains and fertilizers sectors. Those flows now won’t be possible.

Other Swiss towns are facing departures. Zug, long a hub for commodities trading because of its ultra-low taxes, became infamous globally in the 1980s as a refuge from US justice for legendary trader Marc Rich. Commodities businesses there are also looking to the Middle East.

Zug-based Suek AG, the exclusive marketer of coal from Russia’s biggest producer, is planning to set up a Dubai trading business. EuroChem Group AG, one of the world’s largest fertilizer producers with the majority of its assets in Russia is also setting up a Dubai-based venture. Both were formerly owned by billionaire Andrey Melnichenko until after the Ukraine war began.

Several boutique firms in Dubai with links to some larger trading houses have also explored Russian deals, people familiar with the matter said.


Dubai’s Strategy


The UAE has attracted wealthy Russians and their money since the invasion of Ukraine, and now state-run businesses and private commodity firms are following.

The UAE has developed its financial infrastructure for this kind of moment. The emirates’ banks have in recent years grown to be a mainstay in commodities trade finance, and a regular feature in the syndicated revolving credit facilities issued by the industry’s biggest houses.

Dubai’s plethora of free-trade zones, its proximity to Middle Eastern energy producers, and low taxation have already proved enticing too, even if the city still has ground to make up on global centers like Singapore, London, Geneva and Stamford. Last year, the Dubai Multi Commodities Center hosted an event with the Moscow Chamber of Commerce aimed at attracting Russian businesses to set up companies there.

“Dubai has emerged as a real global commodities hub,” said Najla Al Qassimi, the Dubai-based director of global affairs at B’huth think tank, who was previously based in Geneva. “There’s the right infrastructure, transportation and services to support these companies.”

Newsletter

Related Articles

0:00
0:00
Close
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
×