Saudi Arabia And Russia's GAME CHANGING Oil Strategy LEAVES U.S In Dust | HUGE THREAT To The West
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Did you know that Saudi Arabia and the United Arab Emirates have been purchasing petroleum products from Russia at a steep discount, despite concerns from the US? This comes as a response to the sanctions the US and its Western allies imposed following Russia's invasion of Ukraine.
Moscow has lost many of its traditional trading partners, prompting them to sell at lower prices.
Meanwhile, the UAE has become a critical storage and trading location for Russian energy products that are difficult to transport globally due to the war. Oil-rich Gulf nations have surprisingly become willing trade partners for Russia, benefiting from the reduced prices.
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The Gulf countries are rebelling against the US by ignoring discounted Western products and choosing cheaper Russian products instead. They're not only using these products for themselves but also selling their own oil at market prices.
This bold move has led to a surprising boost in profits for these countries, which have some of the world's largest oil reserves. This shows how the Western sanctions have led to unexpected results, leading to the US losing its power in the Middle East.
Even though there's no sign of Gulf countries stopping to use Russian oil, this announcement brings attention to Saudi Arabia changing their focus to a nationalist energy policy that favors their interests instead of the US'.
It has recently been reported that Russia's oil exports to the UAE have hit an all-time high, with a whopping 60 million barrels in 2021. Unfortunately, the situation is different in Singapore, where exports only saw a 13% increase, totaling 26 million barrels.
In Fujairah, Russia's gas oil accounts for more than 10% of the product storage, second only to Saudi Arabia. Moreover, there has been a significant surge in Russian exports to Saudi Arabia, with over 100,000 barrels per day, which means more than 36 million barrels annually. This is a big rise from almost zero exports before the Ukraine conflict.
Nevertheless, the collaboration between Russia, the UAE, and Saudi Arabia has alarmed US officials, who see it as a challenge to Western attempts to pressure Russia regarding the Ukraine crisis.
In February, Brian Nelson, the US Undersecretary for Treasury, visited the Middle East to encourage nations such as Saudi Arabia, UAE, and Turkey to maintain Western sanctions against Russia.
The UAE sticks to the sanctions set by the United Nations and has strong measures in place to handle sanctioned entities. But the nation is determined to fulfill fair and transparent business transactions with its international partners.
Earlier this year, Saudi Arabia and its partners decreased their oil production to increase oil prices. And the decision disregards the US's concerns that this would help Russia's military efforts.
Dubai and other Emirates have become popular global centers for many wealthy Russians and their companies who desire to do business without facing Western restrictions. Russia's primary crude, Urals, has been trading at more than 30% below the standard Brent in recent months due to sanctions and pricing restrictions.
Now, Aramco, the oil company owned by Saudi Arabia, revealed on March 12 that it made a record breaking yearly profit of $161 billion in 2022.
This marks the biggest profit ever reported by an energy company. The profit included a 27% rise in earnings for Aramco's refining unit, which is the company's largest division and is controlled by the state.
The report shows that the Persian Gulf nations have plenty of refined products, such as Naphtha, fuel oil, and Diesel.
Nonetheless, they recently imported from Russia to benefit from the lower prices. Russian Naphtha and Diesel are sold at $60 and $25 per ton less, respectively, than the ones produced in the Persian Gulf.
In 2022, France and Italy significantly decreased their reliance on Russian motor fuel by increasing their Diesel imports from Saudi Arabia. Meanwhile, the US and EU have promised to take action against any efforts to disrupt the energy markets.
The US and EU promised to tackle any actions that could cause chaos in the global energy markets. They met in Brussels to discuss how Russia's attack on Ukraine affects things.
Since Russia reduced gas supplies to Europe after invading Ukraine, energy cooperation between the US and EU has increased. This is because the invasion caused a shortage of energy supplies in Europe, and prices skyrocketed.
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