Trafigura faces losses of hundreds of millions of dollars in Mongolia – Kommersant

Trafigura Group may face significant losses related to the company’s oil business in Mongolia. This is reported by Bloomberg with reference to own sources.

According to agency sources, Trafigura discovered the problem several months ago. At the same time, the sources did not specify what kind of problem the company had. Trafigura itself noted that the trader recently agreed with buyers of petroleum products in Mongolia on new debt repayment schedules. “We have been trading oil and metals in Mongolia for many years. We have a good track record of successfully collecting debts from counterparties in emerging markets,” a company representative told Bloomberg. The company did not specify how great the risks of debt are.

This is not the first such problem for Trafigura recently. So, in February last year the company revealedthat she was deceived by one of the metal sellers from India by putting a cheaper metal – ordinary steel – in the containers instead of nickel. That deception cost the trader more than $500 million.

But, as the agency’s sources note, the scale of the current problem is not comparable to the losses from nickel fraud. Mongolia’s oil market is small in itself. According to the latest data from the US Energy Information Administration for 2021, the entire Mongolian petroleum products market was valued at $1 billion.

Kirill Sarkhanyants