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Saudi crude exports to Asia may fall due to discounted Russian oil

Aramco Reuters/Ahmed Jadallah

Saudi Arabia’s oil exports to India and China will be slightly hit due to the sanctions imposed by the US and European Union (EU) on Russia, according to the King Abdullah Petroleum Studies and Research Center (KAPSARC) report.

The two Asian countries will buy more discounted Russian crude, which will benefit their gross domestic products (GDPs), Arab News reported, citing the report.

One immediate implication would result in a short-term loss for the kingdom’s oil market share in India and China.

The report said this will have a small impact on Saudi GDP of up to 0.2 percent.

KAPSARC expected oil prices to rise five percent per annum from their baseline equilibrium in the next two years due to the Russian sanctions.

Sanctions from both the G7 and the EU are set to begin on December 5, according to Reuters.

The EU will ban seaborne shipments of Russian oil from December 5 and products from February 5, 2023, cutting the trade off from financial services and potentially halting it worldwide.