Julia Payne and Laura Sanicola

(Reuters] – Lukoil’s Swiss trading unit has halted operations, citing three sources familiar with the matter. This was after it cut the supply of capital necessary to cover nearly $1Billion in margin calls.

Litasco handled more than 3 million barrels of crude daily and is now focused on exporting oil to Lukoil’s European refineries, traders reported.

After Russia invaded Ukraine last month, the United States and Britain targeted Russian exports of energy with sanctions. Many EU companies have also taken tough measures, including freezing Russia’s central bank assets.

Although the United States and European countries did not prohibit business with Lukoil but energy companies and shippers imposed sanctions on Russian shipping companies to prevent them from trading without prior warning.

Russian corporations and oil buyers have not been able to obtain letters of credit from Western banks in order to finance their purchases.

Litasco has made trading firms wary about dealing with them due to credit issues.

Two sources confirmed to Reuters that Litasco was instructed to cease hedging to save cash.

Lukoil declined to comment on requests. Litasco explained that Lukoil was a subsidiary, publicly traded, of Lukoil and it does not comment on “rumors, political, or business-related matters.”

Lukoil traders transport crude oil into European refineries, and market their products. However, the company has drastically reduced its buying of crude from third parties for trading or refinery supply. Sources familiar with the matter said that Reuters was informed by Reuters.

Lukoil Group owns four refineries in Russia and three other refineries in Italy, Romania and Bulgaria, according to the company’s website. The company also holds a 45% share in a Netherlands refinery. According to company figures, the refineries have a combined total capacity of 80.4 million tons.

Litasco’s trading of power and gas, as well as carbon emissions has been significantly decreased, according to one trader. These factors contributed thousands of million dollars in revenue for the company last year.

Litasco Trading Arm handles all fuel trading, including gasoline and diesel. According to Reuters, a top trading source said that Litasco would likely keep traders who are associated with its core energy assets.