* After buying co-founder's stake, Tornqvist says trading mostly normal
* U.S. banks among first to clear trades on Friday, CEO says
* Shell decided trade could continue after review - email
* Gunvor active in oil market on Friday, trades with Total (Updates, recasts with CEO interview)
By Dmitry Zhdannikov, Peg Mackey and Ron Bousso
NEW YORK/LONDON, March 21 (Reuters) - Swiss commodity giant Gunvor was doing business with oil firms and U.S. banks on Friday after shock sanctions on Russian co-founder Gennady Timchenko rattled counterparties and threatened to disrupt its $250 million a day business.
While a few anxious trading partners are still reviewing their activities, business is steadily returning to normal after several harried days preparing for possible sanctions and then containing the fallout, Chief Executive Officer Torbjorn Tornqvist said.
Tornqvist took full control of the trading empire this week after buying out Timchenko's 43.5 percent share.
The firm had multiple calls with banks, bond investors and counterparties on Friday morning to explain its position.
"All banks are supporting us. All U.S. banks were among the first to clear us," Tornqvist told Reuters. "The vast majority of counterparties have also done this. There are still a few going through their reviews."
The United States added Timchenko and several other Russian businessmen to its sanctions list on Thursday to put pressure on Russia over the annexation of Crimea. Gunvor, the world's No. 4 oil trader, said Timchenko had sold his share on Wednesday as part of a contingency plan to keep the business he co-founded in 1997 running smoothly.
"We have been assessing the situation for a few weeks. And we saw that sanctions of that sort might be coming," Tornqvist said. "By Wednesday, we were pretty convinced that the sale was the only way forward for the company."
He declined to say how much he paid for the stake, saying only it was "fair value."
Timchenko, 61, was listed by Forbes as the 61st richest person in the world this month, with an estimated fortune of $15.3 billion.
The U.S. Treasury department said on Thursday the sanctions targeted Timchenko and not Gunvor, but the news still spooked counterparties across the world which trade more than 2 million barrels of crude oil and refined oil products with Gunvor every day, plus other commodities including natural gas and coal.
Oil major Royal Dutch Shell concluded that it could still trade with Gunvor after reviewing the sanctions and Timchenko's share sale, according to an internal email.
A Shell spokesman declined to comment on the email.
"Shell monitors trade controls and sanctions closely and will respond appropriately to ensure that we comply with all applicable international sanctions and related measures," the spokesman said.
U.S. giant Exxon was also still trading with the firm, a source said.
Chevron had no immediate comment on the status of any trading with Gunvor, while ConocoPhillips said it acted in full compliance with U.S. law.
European oil company Lundin Petroleum, which shares a stake in a Russian oil development with Gunvor, said its business relationship with the firm was not affected.
Gunvor trades nearly 3 percent of the world's oil supply, having grown from a $5 billion a year bit player in European markets in 2004 to a global behemoth with turnover of $93 billion in 2012.
"Gunvor is a very profitable company," Tornqvist said. "We continue to grow, expand and diversify outside Russia. Only 20 percent of our business is based in Russia these days. We should not be dragged into things such as sanctions on Russia.
"The reality is we are not on the sanctions list and we don't expect to be," he said.
Gunvor is not a well-known name outside of oil and commodities trading circles. It trades commodities on U.S. exchanges and enters into derivatives and swaps transactions with the biggest players in energy and banking. Its counterparties and banks include Goldman Sachs and Vitol SA.
Gunvor was active in the oil market on Friday, buying a cargo of gasoline from France's Total in Asia and selling gasoil in Europe.
On a conference call with investors, Gunvor sought to reassure bondholders.
"We had a great deal of support. The banks had to digest the situation. They saw we are not in the sanctions list and that we made steps to ensure continuity of the business," Gunvor's spokesman said. "It is not business as usual yet but we are on the path to it."
Bond traders priced in a greater risk of default on Gunvor's $500 million of notes due in May 2018, with yields jumping to above 10 percent from around 7.5 percent before the sanctions on Timchenko were announced.
The U.S. Treasury cautioned Americans on Thursday against conducting transactions with a Russian firm that may be controlled by an individual under sanctions, even if that person does not hold a majority stake.
In naming Timchenko, the U.S Treasury said Russian President Vladimir Putin had investments in Gunvor. Putin did not respond on Friday to the allegation, but he has repeatedly denied having helped Timchenko build his oil empire. (Additional reporting by Seng Li Peng in Singapore, Julia Payne, David Sheppard, Sujata Rao-Coverley and Simon Falush in London, Dmitry Zhdannikov in New York; Writing by Alex Lawler; Editing by Veronica Brown, Anthony Barker and Ross Colvin)