LONDON: The European Union (EU) and the United Kingdom (UK) have imposed sanctions on Pakistani oil trader Murtaza Ali Lakhani for allegedly helping Moscow to circumvent Western sanctions on crude exports that help to fund Russia’s war in Ukraine.
The UK accused 63-year-old Canadian-Pakistani Lakhani of “obtaining a benefit from or supporting the Government of Russia, by owning and/or controlling, directly or indirectly” several companies involved with Russia’s energy sector, including Tejarinaft, Fossil Trading and Dubai-based Amur II.
Lakhani, a former Tory donor, is the highest-profile oil trader to have been targeted by Western sanctions since Russia’s full-scale invasion of Ukraine in 2022. The move against Lakhani comes as the UK and EU are seeking to maintain pressure on the Kremlin, amid US efforts to force through controversial proposals for peace between Moscow and Kyiv.
Lakhani, a prominent Pakistani businessman who long used London as a base and is well-connected in British political circles, made a name for himself as a savvy operator in some of the most challenging jurisdictions.
Lakhani has been sanctioned separately by the EU as well. The latest EU sanctions prohibit the bloc’s citizens from doing business with the listed companies and individuals, reducing their access to shipping and insurance providers. The EU has listed more than 2,600 individuals and companies in total. Among those targeted by the EU is Canadian-Pakistani oil trader Murtaza Lakhani, CEO of trading company Mercantile and Maritime.
“Through his companies, he enables shipments and export of Russian oil, notably from the Russian state-owned oil company Rosneft,” said the listing in the EU’s Official Journal.
“In particular, Murtaza Lakhani controls vessels transporting crude oil or petroleum products originating in Russia or being exported from Russia.”
His three companies were also hit with sanctions by the UK, as was UAE-registered Mercantile & Maritime Group, with offices in London, Dubai, and Singapore. Lakhani, who was educated in London, built M&M into a significant international oil trading company, appointing grandees to its board, including a former head of the British army.
It set up a UK arm in 2015, which Lakhani owns and remains a director of, records show. That company, Mercantile & Maritime UK Limited, donated £500,000 to the Conservative party during then prime minister Boris Johnson’s 2019 election campaign, according to electoral records. M&M UK has not been hit with sanctions.
The Financial Times last month reported that Lakhani since 2022, had been linked to three companies incorporated in the United Arab Emirates that were involved in the supply of Russian oil, including Tejarinaft FZCO, which was renamed Nexus Oil Trading last year.
At the time, Lakhani’s lawyers said he did not “own or control” any of the businesses but had “provided them with ad hoc advice and assistance”.
The UK government said that the UK sanctions are squeezing Putin’s revenues, and his creaking war economy has been in free fall since the UK and US sanctioned Russia’s two largest oil companies in October.
As a result, oil revenues have hit their lowest level since Putin launched his full-scale invasion, falling over a quarter in the last year. Sanctions Minister, Stephen Doughty, said: “With Russian oil revenues in free fall, now is the time to tighten the squeeze on Putin’s brutal war machine and bring Russia to the negotiation table. Our message is clear – the UK will not rest until Putin ends the bloodshed and there is a just and lasting peace in Ukraine. The UK is cracking down on profit-hungry traders making millions off illicit Russian oil. Today’s measures target billionaire oil tycoon Murtaza Ali Lakhani and companies in his shadowy network that have become some of the largest traders of Russian oil since 2022.”
In a statement to Geo News, Lakhani’s lawyers said: “Mr Lakhani denies the allegations that he owns or controls any shadow fleet of vessels trading Russia petroleum products in breach of any applicable sanctions law. Mr Lakhani is immediately pursuing all avenues of legal remedy and redress to defend, refute, and appeal the unfounded, unfair and politically motivated sanction designations of the EU and UK.”
Lakhani started his career at global trader Glencore, where he worked on Iraqi oil exports during the Saddam Hussein era and later moved to Iraq’s Kurdistan region, where he acted as an intermediary between the oil ministry and international companies to sell oil independently of Baghdad.
During this period, he helped Russian state-controlled energy giant Rosneft to sign oil and gas deals in Kurdistan, working closely with Rosneft CEO Igor Sechin, including during signing ceremonies at Russia’s main economic forum in St Petersburg.
Building on this relationship, Lakhani partnered top oil trader Vitol to invest in a 5% stake in Rosneft’s largest oil project in decades, Vostok Oil in the Arctic.
“This country (Russia) is the largest resource country in the world. Hampering it is a very short-term effect, not a long-term goal for anybody. They will always need Russia,” he told Russia’s SolovievLive at the St Petersburg Forum in June.
