Is the West buying laundered Russian oil? Plus: Caveats to China’s GDP rebound, copper supplies are tightening, Chile wants to nationalize lithium, hurdles for US LNG projects, and CXMT’s IPO.
It’s counterintuitive, but good business: The oil-rich petrostates of Saudi Arabia and the United Arab Emirates are snapping up steeply discounted Russian oil products for domestic consumption and refining.
According to data provider Kpler, Russian oil exports to the UAE tripled to 60 million barrels last year, while exports to Saudi Arabia are on pace to hit 36 million barrels this year, up from insignificant pre-war levels.
Other eager buyers of Russian oil are China and India, which together have bought the majority of Russian oil this month at prices above the West’s price cap. That’s bringing in strong revenues for the Kremlin, undermining the West’s attempts to starve Moscow’s war machine.
And, to add insult to injury, Western countries are indirectly funding the Kremlin as well. The G7, EU, and Australia have banned or limited imports of Russian oil and oil products. But the sources that those countries have turned to to replace Russian oil are themselves buying from Russia: According to a new report from the Center for Research on Energy and Clean Air, the price cap coalition countries have significantly increased imports from countries that are gobbling up Russian crude.
The report identified China, India, Turkey, the UAE, and Singapore as the five “laundromat countries:” They have increased purchases of Russian oil, which they then “launder” into products shipped to other nations—with the price cap coalition being major buyers. This indirectly finances Putin’s war chest. It’s also not exactly a surprise. None of the policy measures employed by the price cap coalition countries have changed the fundamental truth that Russia is a global energy giant. And nothing comes of nothing.