Saudi Arabia doubles down on buying cheap Russian oil

The amount of Russian fuel oil imported by Saudi Arabia between April and June this year more than doubled from last year, Reuters reported on Friday.

“Data obtained by Reuters via Refinitiv Eikon vessel tracking showed that Saudi Arabia imported 647,000 tonnes (48,000 barrels per day) of fuel oil from Russia through Russian and Estonian ports in April-June this year. This was up from 320,000 tonnes in the same period a year ago,” the news agency reported on July 15.

Detailing the significance of recent sales figures, Reuters wrote:

Rising sales of fuel oil, used in power generation, to Saudi Arabia show the challenge US President Joe Biden faces as his administration seeks to isolate Russia and cut its export revenues from ‘energy.

While many countries have banned or discouraged purchases from Russia, China, India and several countries in Africa and the Middle East have increased their imports.

Biden was on a visit to Saudi Arabia on Friday and was expected to seek increased oil supplies to world markets from the kingdom to help bring down oil prices that have fueled inflation around the world.

The United States and other Western allies have reduced Russian energy purchases since late February after Moscow launched its latest war with neighboring Ukraine. India and China have stepped in to fill this trade gap.

The world’s second largest economy [China] imported about 8.42 million tons of oil from Russia last month, an increase of 55% compared to a year ago,” Agence France-Presse (AFP) reported on June 23.

“India bought six times more Russian oil from March to May compared to the same period last year,” AFP noted, citing data from research firm Rystad Energy.

Russia would sell its oil at steep discounts as part of a Western boycott of the product. The low price has allowed Moscow to circumvent the expected effects of the embargo so far. Reuters reported on May 25 that Russian oil exports have not fallen to date despite a campaign of Western sanctions against Moscow in response to its ongoing war with Ukraine. Many international traders have avoided buying Russian oil since the conflict began on Feb. 24 due to side effects of the sanctions, such as disruptions to shipping procedures and payment systems.

Washington led the West to impose a series of financial sanctions on Russian companies and entities in late February to punish Moscow for invading Ukraine. The campaign severely hampered Russian business transactions, including oil sales.

Saudi Arabia holds 15% of the world’s proven oil reserves and is the world’s largest oil exporter. The Kingdom has the “largest crude oil production capacity in the world at nearly 12 million barrels per day”, according to the US Energy Information Administration (EIA). The EIA estimated Saudi Arabia’s crude oil production at 9.8 million barrels per day in October 2021.

Riyadh recently signaled its reluctance to increase oil production, an action unofficially sought by Western leaders, including US President Joe Biden, to reduce record fuel prices in countries like the United States.

Saudi Energy Minister Prince Abdulaziz bin Salman said on March 29 that attacks on Saudi oil facilities by Houthi terrorists from Yemen in previous days had compromised Riyadh’s ability to provide the world with sufficient supplies of fuel.

Saudi energy minister referred to “attacks by Yemen’s Iran-backed Houthi rebels against Saudi oil facilities, including a wave of drone and missile strikes on Friday [March 25]“, reported AFP at the time.

Bin Salman said these nefarious acts had “challenged our ability to provide the world with the necessary energy needs”.


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