SAUDI ARABIA/RUSSIA: Saudi Arabia has a thirst for heavily discounted Russian diesel and other fuel products banned by many countries in the West.
The world’s largest oil exporter more than doubled the amount of Russian fuel oil in the second quarter to supply power generation stations to meet surging cooling demand this summer and allow the kingdom’s crude exports to increase.
Western sanctions forced Russia to discount fuel oils on spot markets, which has increased demand in the East, not just from the Saudis but also from China and India.
Energy trade data provided by Reuters shows Saudis imported 647,000 tons (48,000 barrels per day) of fuel oils from Russia in the second quarter — up from 320,000 tons in the same quarter last year.
The surge in the Russia-Saudi energy trade comes as BRICS International Forum President Purnima Anand told Russian newspaper Izvestia that Saudis are planning to join. That would boost multilateral cooperation between BRICS, including Saudis, meaning they wouldn’t cave to the US demands to restrict Russian energy imports.
Meanwhile, the Biden administration has unleashed a barrage of financial sanctions against Russia to isolate it from the global trading system to reduce trading revenue — all of which have backfired — and allowed Moscow to reap record oil revenues.
President Biden will meet with Crown Prince Mohammed bin Salman (MbS) without Saudi King Salman on Friday (the same day Anand announced Saudis are preparing to apply for membership). It’s expected that no public announcements on increasing oil supply will be made, according to Bloomberg sources.
Biden’s meeting with MbS appears to be a waste of time and more for optics. The fundamental point behind the meeting to increase crude production won’t transpire into anything meaningful. Biden needs to work on expanding the capacity of refined oil products, such as gasoline, diesel, and jet fuel, though much of that is out of his control and will take years.
The point is that Saudis need cheap Russian fuel oils and plan to join an expanding economic club that will distance themselves from Western countries and aligns them more with Russia and China. The rise of BRICS and the possible inclusion of Saudis would outline the US’ waning control over the international order.
by Tyler Durden
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