‘When the price is right, there’s always a way to move the merchandise’

Russia’s oil industry used to be focused on supplying Europe. Sanctions in response to the invasion of Ukraine changed all that. However, Russia has no shortage of buyers for its crude; the risk is shipping it.

As we bounced along in his old car, Alam Khursheed told us, ‘Back in the day, this was the village of Al-Qurayyah.’ Both sides of the road were lined with hulking tanks of fuel oil, shimmering in the scorching sun of the Arabian desert. ‘Everyone ended up leaving; the smell of petrol was too much for them. Then everything was torn down and replaced with these tanks.’ Khursheed, who migrated here from Pakistan five years ago, had taken us to one of the world’s largest petroleum product storage sites, north of the port of Fujairah in the United Arab Emirates (UAE).

The mountain there was being excavated to further expand this wind-whipped industrial zone overlooking the Gulf of Oman, where the horizon is crowded with tankers stopping to resupply or unload. An ever-growing number carry Russian oil from the Kerch Strait, the Black Sea, the Azov Sea or the Baltic. Port activity has soared since late 2022, when the EU and G7 prohibited its direct import in response to Russia’s invasion of Ukraine. Before the bans, Europe received 1.5 million barrels of oil a day from Western Russia; much of it now passes through here.

Fujairah, across the Strait of Hormuz from Iran, already has over ten years’ experience laundering its neighbour’s oil to skirt sanctions. It’s simply scaled up to handle the volume of oil from Russia, the world’s second-biggest exporter. To boost resale prices, some companies here store the product and mask its origin by blending it with crude from elsewhere, or refining it. ‘Until recently we had only small refineries in the area, but big investors have set up shop and increased capacity,’ explained Bilal Hasan Ashraf, an executive at the National Bank of Fujairah. The port provides access to oil markets in Gulf states – Saudi Arabia, for example, which prefers to consume cheap Russian oil domestically and sell its own at a premium in Europe – but it has above all become a transit point for maritime traffic since the sanctions (…)

Full article: 3 942 words.

(5) Manuel Abebe and Agathe Duparc, ‘Russian oil trade: Dubai pulls out all the stops to edge out Switzerland’, Public Eye, Lausanne, 21 November 2023, www.publiceye.ch/.

(6) Anna Hirtenstein, Costas Paris and Joe Wallace, ‘The secret oil-trading ring that funds Russia’s war’, Wall Street Journal, 19 February 2024.

(8) Manuel Abebe, Robert Bachmann and Agathe Duparc, ‘Russian oil trade in Switzerland: a fake farewell?’, Public Eye, 20 March 2023, www.publiceye.ch/.