Saudi Arabia Imports Russian Diesel – Reselling to the West
Saudi Arabia – a supposed US ally – is buying record amounts of Russian diesel to evade US sanctions on Russian crude and oil product imports.
The kingdom imported 261,000 tons of Russian diesel over the past two months at a cost roughly $20 lower than the Middle East benchmark. As a whole, the Middle East exported more than 1 million tons of diesel to northwest Europe during Q1 of this year (compared to 785,000 tons per month during Q4 of last year).
Monthly exports to Africa reached 2.57 million tons in March; an increase from 1.3 million last year.
As Middle Eastern nations like Saudi Arabia and Kuwait provide more industrial fuel to Europe and Africa, Asian suppliers are finding themselves pushed out of the market entirely. This is occurring as prices and margins in the east are “already hovering at their lowest in more than a year,” notes a report from Reuters.
The increasing supply is expected to impact global refining margins, which could drop as low as $6.60 per barrel during Q4 (compared to $11 during Q4 of 2022).
In the meantime, traders are taking advantage of low prices to stock up on fuel at major oil hubs in SA and UAE before re-exporting it. More than 500,000 tons of fuel is said to have been discharged at these hubs during the month of March.
Sources:
Saudi Arabia buys Russian oil to evade US sanctions
Said Arabia is Buying Russia Oil at Record Levels and Laundering it Onto the European Market
I guess so much for sanctions? And it would appear that the arabs do not care if Putin kills Ukrainians as long as they can sell their oil. I wonder how Russia gets oil from Russia to Saudi Arabia without the US or anyone noticing?
Saudi’s have been selling Russian oil for a few years now. This story is just about an increase.
Barriers, blockades, sanctions, ——> everyone knows that none of these are perfect and get less perfect as time progresses.
Everyone needs oil and wants the lowest price.
Everyone who supplies oil needs to sell it or stop drilling, so without a buyer, the price gets lower and lower….
Sooner or later, someone will favor arbitrage profits over patriotism or community. The Saudi’s don’t place a priority on the later, are well equipped to arbitrage oil, they have all the infrastructure and there you have it.
Now we can yell, sanction, or worse —-> no doubt we start with the yelling, but we’ve been doing that for years.
So, while we all knew sanctions ain’t perfect, don’t work 100%, closing the Saudi’s down is like squeezing an oil balloon; the stuff will just squirt out somewhere’s else, someday soon. But what’s the bottom line: the Russians make less money, and less profit over their costs, the Saudi’s make some arbitrage bucks off buying Russian oil on the cheap and selling it to Europe and China at market prices. Europe and China get oil at market prices, have more readily available supply, and suffer less due to lack of supply, higher prices.
Hmmm, maybe sanctions work after all, just not as good as intended.
Sounds to me like Russia is the big benefactor since Biden has been in office.
Good job.
Nyet!
Actually Darren, Russia profits less durning the war via oil. Saudi’s profit more and China/Europe get fair market price, more supply, probably about break even.
Russia still loses, just not as much.