- Gulf nations are snapping up cheap Russian oil products while exporting their own crude at market rates.
- Saudia Arabia and the UAE have emerged as key storage and trading hubs for Russian products, the Wall Street Journal reported.
- Russia is sending 100,000 barrels a day to Saudi Arabia, up from effectively zero pre-Ukraine war, Kpler data shows.
Petro-rich nations in the Persian Gulf are buying discounted Russian oil products as Moscow continues to seek willing buyers while the West shuns the warring nation.
The United Arab Emirates and Saudi Arabia are using those Russian barrels within their own borders for consumption and refining purposes, while exporting their own products at market rates, the Wall Street Journal reported.
Russian naphtha and diesel sell at discounts of $60 and $25 a ton, respectively, according to the report.
In addition, the two countries, particularly the UAE, have emerged as key trade and storage hubs for Russian oil and fuel. Trading firms import Russia energy to the UAE and re-export it to Pakistan, Sri Lanka or East Africa, the report said.
Kpler data shows Russian oil exports to the UAE more than tripled to 60 million barrels last year. Separate Argus Media data cited by the Journal show Russia now accounts for more than 10% of gas oil stored in Fujairah, the UAE's main oil-storage center.
Meanwhile, Saudi Arabia is importing 100,000 barrels a day from Russia after seeing effectively zero before Russia war on Ukraine, translating to an annual pace of about 36 million barrels.
US officials have objected to the burgeoning relations between Russia and the Gulf nations. But with Russia's Urals crude trading at more than a 30% discount to Brent crude, the international benchmark, the arbitrage is particularly attractive.
Moscow has proven capable of navigating Western sanctions and price caps well enough to push oil exports above levels reached before it invaded Ukraine. In the first quarter, Russia's seaborne crude exports hit 3.5 million barrels a day, compared to the 3.35 million barrels reached in the year-ago quarter.
Meanwhile, Kpler data shows that China and India now account for roughly 90% of Russia's oil, with each country taking in 1.5 million barrels a day — more than enough to absorb the volumes no longer heading to European nations.
Still, even with other countries plugging the gaps left by sanctions, Moscow hasn't been able to maintain the same level of energy profits amid war. The International Energy Agency said Friday that the country's export revenue is down 43% compared to the same time last year.