Saudi Arabia and the UAE are buying up russian oil at great discounts
Then they sell the oil for export at market value, making money on the price difference
The leading oil producers of the Persian Gulf are actively buying up ussian oil products. Having lost their traditional customers in Europe, russian companies are forced to sell diesel, naphtha, and fuel at discounts, which makes their new customers well off.
Source. The Wall Street Journal writes about this with reference to oil top managers and analysts.
Oil producers in Saudi Arabia and the UAE buy cheaper russian oil products for use in the domestic market and export their crude oil and products at higher world market prices.
These countries have more than enough of their own oil products, "so the only reason to import them from Russia is to make money on the price difference," says Elshan Aliyev, director of Middle East oil products at Argus Media, a pricing agency.
According to him, oil and diesel from russia are sold at discounts of $60 and $25 per ton, respectively, compared to equivalent grades produced in the Persian Gulf.
At the same time, over the past year, Saudi Arabia has significantly increased its diesel exports to France and Italy, which previously mainly bought russian fuel, according to Kpler data. russia "is largely saturating the Saudi market with cheaper transportation fuels, freeing up locally produced diesel for export to other countries," says Kpler analyst Victor Katona.
State-owned Saudi Aramco earned $161 billion in 2022, a record profit for any oil company in the world. The profit of its petroleum products division increased by 27%.
The UAE, meanwhile, has become a major center for trade in oil and products from russia, both for domestic and foreign markets. Since December, Dubai's Emirates National Oil has received five tankers with gasoline, and in November, 700,000 barrels of crude oil from the Arctic were delivered to the Abu Dhabi National Oil refinery, according to Kpler data.
Before the war in Ukraine, Saudi Arabia hardly ever bought oil and oil products from russia, but now it buys about 100,000 barrels per day, according to Kpler (more than 36 million per year).
Background. Meanwhile, it has been reported that russia sells oil under false documents to circumvent sanctions.
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