Report: Saudi Arabia Increases Russian Oil Buys, Selling Pricier Saudi Oil for Profit

FILE - Fuel trucks line up in front of storage tanks at the North Jiddah bulk plant, an Ar
AP Photo/Amr Nabil, File

The government of Saudi Arabia dramatically increased purchases of Russian diesel fuel this month, apparently for use at home while selling more expensive Saudi oil abroad, reports indicated this week.

The Indian network First Post reported on Monday, citing a report in Bloomberg last week, that Saudi Arabia is “buying diesel from Russia in very large quantities,” offsetting the desired effects of sanctions on the Russian oil industry imposed by Europe and the United States. Russia has been forced to sell much of its fossil fuel product – petroleum, natural gas, and coal – a steep discounts following the imposition of sanctions that limited the pool of potential buyers.

Europe still heavily depends on Russia for its fuel, but countries such as China, India, and Saudi Arabia have stepped in to fill much of the void left by sanctions.

The Bloomberg report on Saudi oil purchases follows similar revelations that India is buying cheap Russian crude oil, refining it, then selling it to Western nations at a profit.

The report, published on Friday, stated that Saudi Arabia imported nearly 2.5 million barrels of diesel from Russia between March 1 and March 10, “far more than at any other time in the last six years.”

“At the same time, vast amounts of the fuel continue to be sent from Saudi Arabia to Europe, which on paper looks like a potentially lucrative move,” Bloomberg detailed. “While the precise economics of diesel shipments in and out of Saudi Arabia are hard to know, traders could potentially turn a profit by essentially buying Russian fuel while also selling to Europe at a higher price.”

Bloomberg similarly reported in February that India has increased its purchases of crude Russian oil, only to refine it and begin cornering large percentages of the American and European refined oil product market. As of February, India was shipping 89,000 barrels of gasoline and diesel to New York a day and 172,000 diesel barrels to Europe a day. The Indian government never confirmed that the refined products were of Russian origin, but these increases corresponded to Russia becoming India’s top oil supplier starting in October, overtaking Saudi Arabia. Indian officials have brushed off any criticism of doing business with Russia as the invasion of Ukraine rages, insisting the government has “no moral conflict” with buying Russian oil.

As in India, Russia has also become extremely competitive against Saudi Arabia in selling oil to China. Chinese regime data published this week showed Russia overtaking Saudi Arabia in oil sales to that country in both January and February this year. Saudi Arabia was China’s top oil supplier in 2022.

Despite competing in third-party markets, Saudi Arabia’s reported persistence in buying Russian oil indicates that the two countries have found a way to both increase their profits by simply selling different products. The Saudi oil company, Aramco, posted a record annual profit of $161.1 billion in 2022 – triple the profits of Exxon – even with Russia taking up larger chunks of some oil markets where Riyadh is dominant.

First Post journalist Palki Sharma noted on Monday that the prodigious Saudi purchase is “unprecedented” between the two countries and could signal a significant geopolitical shift in response to leftist President Joe Biden’s catastrophic handling of the American-Saudi relationship.

“The Americans wanted to turn Riyadh into a pariah state. They gave lectures on human rights and then their president flew down to give fist bumps to MBS [Saudi Crown Prince Mohammed bin Salman],” Sharma recalled. “It did not work. Riyadh is now charting its own course, even talking to Tehran without America’s involvement. It controls global oil prices along with Russia.”
As a presidential candidate, Biden promised that, if elected, he would turn Saudi Arabia into a “pariah” over the gruesome killing of Washington Post contributor Jamal Khashoggi in a Saudi consulate. The comments outraged Riyadh, which had drawn closer to Washington under former President Donald Trump and even taken steps to normalize ties to neighboring Israel.

As president, Biden changed his tune, attempting to convince the Saudi government to lead the OPEC+ oil cartel to increase its output and bring down prices. As Sharma noted, Biden visited Saudi Arabia last summer, greeting the crown prince with a fist bump and insisting publicly that he did not intend to convince the Saudis to produce more oil. Yet reports following the meeting indicated that Saudi officials told Biden they would support oil production increases months before greenlighting, alongside Russia, a historic OPEC+ production decrease of 2 million barrels of oil per day, leading to skyrocketing prices for unsanctioned oil.

The Biden administration reacted to the production cut by accusing Riyadh of attempting to support Russia’s invasion of Ukraine, an accusation that outraged the Saudi government. Ukrainian President Volodymyr Zelensky also intervened, thanking Saudi Arabia for its support to Kyiv in a rebuke of the White House.

Saudi Arabia has since pledged a $400 million aid donation to Ukraine, including $300 million in oil products.

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