Saudi Arabia imports record volumes of discounted Russian fuel oil in June

Saudi Arabia imported record volumes — a near tenfold year-on-year increase — of fuel oil from Russia last month at a discount due to Western sanctions on Moscow over the Ukraine war, new data shows.

Europe was formerly the top market for Russian oil and petroleum products but following Russian President Vladimir Putin's invasion of Ukraine in February 2022, Western countries are now blocked from buying Russian fuels.

Since then, Saudi Arabia and other countries in the Middle East and North Africa region have been emerging as top buyers of discounted Russian oil and gas.

Reuters reported Thursday, citing data from analytics firm Kpler, that Saudi Arabia imported a record volume of 193,000 barrels per day this month as the kingdom looks to use fuel oil to meet summer power demand instead of crude oil amid production cuts.

Russia and Saudi Arabia, two of the Organization of Petroleum Exporting Countries' most powerful members, announced a further production cut and a reduction in crude oil exports at the beginning of this month.

Royston Huan, fuel oil and feedstocks analyst at Energy Aspects, told Reuters, “We believe there is a linkage to the cuts, as Saudi Arabia will be incentivized to prioritize their crude exports, therefore prioritizing fuel oil utilities burn over crude oil burn.”

Al-Monitor has contacted Kpler and the Saudi Energy Ministry for comment.

Saudi Arabia has also been snapping up millions of barrels of Russian diesel this year that Europe has banned, allowing more space for the kingdom to export its own supplies to Europe. Bloomberg reported in May that the Gulf country imported 174,000 barrels per day of diesel and gas oil from Russia.

Saudi Energy Minister Prince Abdulaziz bin Salman said at the OPEC International Seminar in Vienna last week that the 23-member cartel will do “whatever is necessary, whatever it takes” to stabilize global oil prices.