Russian petroleum company Rosneft was reportedly looking to buy Wall Street bank Morgan Stanley's oil trading business. In a report by Reuters, the report said Morgan Stanley has been attempting to exit its physical commodity business since last year. Wall Street faces increased regulatory pressure and higher capital requirements from the Federal Reserve.

Sources told Reuters that the talks between Morgan Stanley and Rosneft were already at an advanced stage but could still fall apart. 

Rosneft is currently the top oil producer in Russia. The Russian government owns a 69.5% stake in the company, the report said.

According to Reuters, the state-run oil firm became the world's largest oil producer following a USD55 billion takeover of Anglo-Russian petroleum company in March. Rosneft's crude output accounted 40% of the total crude output in Russia. 

Meanwhile, Morgan Stanley is the biggest oil trader on Wall Street. Stanley's commodity arm owns TransMontaigne Inc., an oil storage and terminal firm operating in the US and Mexico, Reuters said.