Morgan Stanley is trying to sell its merchant oil-trading business.
The trading house Castleton Commodities International has offered $1 billion for it, according to the Financial Times, which cites a person familiar with the matter.
Castleton is backed by hedge fund manager Paul Tudor Jones and Glenn Dubin.
The Russian state-owned oil company Rosneft had tried to buy Morgan Stanley's oil-trading unit, but it abandoned the deal in December because of US sanctions on Russia over the Ukraine crisis.
The sale would include contracts and inventories, the FT reported.
As oil and other commodity prices continue to slide, Wall Street banks have been scaling back trading. And since the financial crisis, new regulations ban the banks from owning global commodities businesses.
Morgan Stanley in late March agreed to spin off its natural-gas business to a newly formed company called Pentagon Energy LLC.
Selling the oil business this year is a priority for Morgan Stanley CEO James Gorman, according to The Wall Street Journal.
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