ZURICH — Swiss officials won applause last week when they broke with the country’s tradition of neutrality by joining the United States, the European Union and others in imposing sanctions on Russia for its invasion of Ukraine. But there was a big gap in the joint effort.

Switzerland is one of the world’s main hubs for commodity trading, and the government estimates that 80% of Russia’s raw materials and resources, such as oil, metals and grains, are traded in Switzerland. , which puts the Alpine nation at the heart of the sale of Russian exports.

Although the country has closely embraced European Union sanctions on banking and commerce, commodity trading has been allowed to continue. It is an important industry in Switzerland, employing around 10,000 people and representing more than 4% of its economy, according to the State Secretariat for the Economy.

Major commodity and energy trading companies, including Glencore, Gunvor and Mercuria, are headquartered in Geneva and the city of Zug. Rivals, like Singapore-based Trafigura have major offices in Switzerland.

Trafigura was in the spotlight last weekend because, according to S&P Global Commodity Insights, it sold Shell a shipment of Russian crude oil at a huge discount. The sale does not appear to violate any sanctions, but Shell has come under fire after saying last week it was pulling its energy business out of Russia.

Shell later said it had made a “difficult decision” to buy the Russian oil because alternative sources would not have arrived in time to serve its customers, and it said the profits from the purchase would go to the humanitarian efforts to help the Ukrainian people. “We have had intense discussions with governments and continue to follow their advice,” Shell said on Saturday.

News of the deal with Shell came amid growing calls to tighten regulation of Swiss commodity traders and introduce a supervisory authority that could monitor the placement of sanctions.

Oliver Classen, spokesperson for Public Eye, a non-profit organization that campaigns for greater scrutiny of the commodities market, said the exchanges took place in Switzerland with “light or no regulation”, which made it difficult to know who the people behind the companies involved in the exchanges and transactions were. “It’s a black box,” he said.

In addition to monitoring compliance with sanctions, a supervisory authority could help alleviate other concerns, such as human rights violations, environmental violations and corruption – three issues the industry is often faced with. associate, Mr. Classen said.

But while commodity trading in Russia is allowed to continue, Swiss bankers and lenders have already essentially restricted it.

“Some banks are not willing to finance trade with Russia at the moment,” said Florence Schurch, general secretary of the Swiss Trade and Shipping Association.

Commodity trading is a capital-intensive industry, which relies heavily on financing to bring deals to fruition. Ms Schurch said bank restrictions had made it difficult for trading companies to open new deals involving commodities from Russia. Last week, traders shunned Russian oil, fearing they could be caught in the trap of Western sanctions.

“Right now, there is undoubtedly huge reputational damage associated with being seen doing business with Russia,” said Giacomo Luciani, an energy economist who teaches at the University of Geneva. He said the country’s business sector was undergoing a rapid breakdown in a web of ties with Russia that began in the 1970s.

Besides oil and gas, Russia is also a major supplier of other commodities, including metals, such as aluminum, and grains. Together with Ukraine, the two countries account for more than a quarter of world wheat exports, raising fears of supply problems.

Elisabeth Bürgi Bonanomi, commodity trading expert at the University of Bern,

said it was too early to say what impact the dispute would have on the Swiss sector, but she expected some of the trade with Russian commodities to shift to another international hub, such as Dubai. And she said Russian banks that have been barred from using the SWIFT global financial messaging system could turn to Chinese alternatives.

“Right now the cards are being reshuffled,” she said.