Reuters: Three Gulf countries to compensate for loss of oil from Russia in case of US sanctions
Photo: Depositphotos

Three Gulf countries – Saudi Arabia, the United Arab Emirates and Kuwait – have sufficient reserve capacity to quickly increase oil production if Donald Trump will fulfill its threats of secondary sanctions. About writes reuters energy columnist Ron Bousseau.

According to Bousseau, Saudi Arabia can produce an additional 2.3 million barrels per day within 90 days, the UAE – 900,000, and Kuwait – 600,000 barrels. This will allow them to quickly compensate for a part of the market in case of interruption of Russian oil supplies.

Secondary US sanctions targeting Russian oil exports could force key buyers to cut back on imports.

India, which in June was the largest importer of Russian oil by sea (1.5 million barrels per day), is engaged in tense trade negotiations with the United States and is unlikely to want to deepen the conflict with Washington.

Read also
The fifth postponement: US postpones sanctions against Serbian subsidiary again Gazprom Neft

In contrast, China, which in June bought about 2 million barrels per day of Russian oil, is unlikely to change its purchases because it is already under several levels of US tariffs and considers its relations with Moscow to be strategic.

But even if China continues to export Russian oil, the price will become cheaper, which will hit the Kremlin's revenues.

Oil and gas exports account for 30% to 50% of the Russian federal budget revenues. Therefore, the Kremlin may take tough steps in response.

The International Energy Agency forecasts that global oil demand will grow by 700,000 barrels per day in 2025, the lowest since 2009.

At the same time, supply will increase by 2.1 million barrels, in particular due to an increase in production by OPEC+ countries, which began to reverse production cuts in April.