Saudi Arabia and the United Arab Emirates (U.A.E.) are among the Gulf states purchasing large quantities of Russian oil, despite U.S. objections and their own oil wealth, the Wall Street Journal reported Monday.
By purchasing significantly discounted Russian oil — the price of which has collapsed following Western sanctions over the invasion of Ukraine — Gulf nations can use Russian oil to fuel their own energy needs, and push up profits on domestically produced oil by selling it worldwide, including in markets where Russian oil is forbidden, the WSJ reported. Russian oil exports to the U.A.E. hit a record 60 million barrels in 2022, more than tripling 2021 levels, while exports to Saudi Arabia climbed from essential none to roughly 100,000 barrels per day since the war began.
Russia is “pretty much satiating the [Saudi] domestic market with discounted transportation fuels and freeing up volumes for subsequent diesel exports elsewhere,” Viktor Katona, an analyst at commodities analytics firm Kpler, told the WSJ. For example, Saudi Arabian diesel exports to France and Italy, countries which formerly relied heavily on Russia for the fuel, have climbed to fill the gap.
Saudi Arabia is buying Russian oil at record levels and laundering it onto the European market to avoid US sanctions per Reuters. pic.twitter.com/6cwJqWR8cs
— whalechart (@WhaleChart) April 11, 2023
State-owned Saudi oil firm Aramco posted a $161 billion annual profit in 2022, up 46% from the year prior, the highest ever recorded by an energy company, the WSJ reported. Aramco has recently committed billions to investments in China, another country that has imported record-shattering levels of Russian oil despite Western sanctions. (RELATED: China To Import Record Amounts Of Russian Oil In Defiance Of US-Led Sanctions)
Treasury Undersecretary Brian Nelson in February visited the Middle East to convince Saudi Arabia, the U.A.E. and Turkey to join Western sanctions, apparently unsuccessfully, the WSJ reported.
An U.A.E. official told the outlet that the country has “robust processes in place to deal with” countries sanctioned by the United Nations. “The UAE will continue to trade openly and honestly with its international partners,” the official told the WSJ.
Although Russia’s oil revenue has plunged by roughly 43% compared to March 2022, to $12.7 billion, its production has climbed to the highest point since April 2020, well before its invasion of Ukraine, CNN reported.
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