Friday, 31 March 2023 to Sunday, 2 April 2023

The Russian Invasion of Ukraine and the Interests of the GCC Hydrocarbon Producers

Fri31  Mar04:45pm(30 mins)
Gilbert Scott Room 251


Nikolay Kozhanov1
1 Qatar University, Qatar


The paper is to argue that, in spite of the fact, that the Western countries managed to limit Moscow's capacities to export oil, the Arab monarchies of the Persian Gulf are unlikely to be able to immediately benefit from the situation. Yet, this may change in the long run. The Russian invasion of Ukraine provides certain opportunities for the oil industry of the Gulf. However, these are not as trivial as it seems. Indeed, in late-February 2022, the demand for Saudi and Emirati oil has substantially increased as they can provide an alternative to Russian supplies both in Europe and Asia. High oil prices, in general, benefit the GCC countries as well, thus, allowing them to refill the financial coffers that were significantly emptied by the pandemic. However, there is already a certain nuance here: ultra-high oil prices always create danger of market overheating and instability. In addition to that, Moscow is also trying to redirect its export flows to the Asian region, the traditional consumer market of the GCC countries. This, in turn, increases the intensity competition there: Urals that is traded at the historical high discount  has already attracted the attention of the Indian and Chinese consumers, thus, hypothetically threatening the Saudi share of the PRC. Finally, there is a political factor that prevents the Arab Gulf oil producers from squeezing Russia out of oil market connected to the regional disappointment in the US.