Saudi Arabia, the world’s largest oil exporter, is also importing Russian crude oil, and the import of Russian oil is accelerating in the second quarter. Obviously, the huge price difference between Russian crude oil and international crude oil has made the Middle East’s largest rich man “tempted”.
Saudi Arabia has reportedly been importing fuel oil from Russia for several years. Not only would this reduce its need to refine crude products and reduce the amount of oil needed to generate electricity, it would also give the kingdom more crude to earn high prices on international markets.
Data show that in the second quarter of this year, Saudi Arabia imported at least 647,000 tons of Russian fuel oil, more than double the amount imported in the same period last year (320,000 tons). In addition, throughout 2021, Saudi Arabia imported a total of 1.05 million tons of Russian fuel oil.
transit import
Not only that, Saudi Arabia is also said to have imported more Russian fuel oil through Fujairah, the Middle East oil hub in the United Arab Emirates. According to ship tracking data, Fujairah has received 1.17 million tons of Russian fuel oil so far this year, compared with 900,000 tons in the same period last year.
The data also showed that 900,000 tonnes of Russian fuel oil may have been delivered to Fujairah in July alone, taking total deliveries so far this year to 2.1 million tonnes, exceeding the 1.64 million tonnes for all of 2021.
Most of Fujairah’s fuel oil is sold there as ship fuel, but some is shipped to neighboring countries. It is unclear how much Russian fuel oil flows into Saudi Arabia through Fujairah.
It is understood that the Kingdom relies on oil to meet its electricity needs. As temperatures rise in the summer, cooling needs typically peak. Some Saudi cities are far from natural gas fields and can only use fuel oil, even though natural gas fields can provide cleaner fuel for power generation.
So it’s a laudable move by Saudi Arabia to buy cheaper Russian oil to meet a surge in summer demand at power stations while freeing up its own crude output for exports that can fetch “higher prices.” Since the outbreak of the Russia-Ukraine conflict, Russia has been selling crude oil and fuel at a discount due to Western sanctions.
Biden’s Middle East trip expected to suffer setback
At the same time, it also illustrates the challenges that U.S. President Joe Biden faces in trying to cut Russian energy export revenue. There is a high probability that his trip to the Middle East will be in vain.
Biden will visit Saudi Arabia in the near future, where he is expected to seek increased Saudi oil supply to the global market to help lower oil prices. High oil prices have led to a surge in inflation around the world, but in the short term, Saudi Arabia and other countries have little spare capacity to increase production.
In addition, some Saudi officials said that Saudi Arabia’s relationship with Russia is closer than ever before, and there are no plans to stop interacting with Russia, nor to help the United States by extracting more crude oil. The country still cooperates with Russia in the OPEC+ alliance.
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