Germany’s Scholz in Saudi Arabia on Gulf energy hunt

German Chancellor Olaf Scholz arrived Saturday in Saudi Arabia at the start of a two-day Gulf tour, in the hope of sealing new energy deals with the fossil fuel exporters.

German Chancellor Olaf Scholz
German Chancellor Olaf Scholz pictured at the entrance of the Chancellery in Berlin on September 23, 2022. Photo: Tobias SCHWARZ / AFP

Scholz, accompanied by a sizeable industry delegation, was received at Jeddah airport on the Red Sea coast by Mecca region’s governor Prince Khalid bin Faisal Al Saud.

Afterwards, he went into a meeting with Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman.

He is also scheduled to meet a group of Saudi women, before heading to the United Arab Emirates on Saturday evening and then to Qatar on Sunday.

The chancellor hopes to agree new energy partnerships with the oil- and gas-rich Gulf states, with the loss of supplies from Russia in the wake of its invasion of Ukraine.

Scholz however is faced with a diplomatic balancing act, as he will have to navigate significant differences with his hosts over human rights.

Scholz’s meeting with the Saudi crown prince is seen as particularly sensitive.

Until recently, Prince Mohammed was regarded as a pariah in the West due to the murder of Washington Post journalist Jamal Khashoggi in 2018.

The German government strongly condemned the journalist’s murder and would not be “editing” its position, government sources indicated ahead of the tour.

Saudi Arabia’s importance as a fossil fuels exporter and regional power meant a “solid working relationship” was needed with the crown prince, a government source explained.

The 37-year-old Prince Mohammed was likely to steer the country through “the next 10, 20 or 30 years”, he added.

Berlin wants to extend cooperation on new technologies such as green hydrogen produced using renewable energy, which Germany could import in vast quantities from the Gulf states, said government sources.

The chancellor would also seek to strengthen political cooperation with the regional powers, courted on the other side by Russia and China.

“We have to work with Saudi Arabia if we want to sort out, for example, the question of the war in Yemen or tackle the Iranian question,” the government source said.

On Sunday morning, Scholz will meet with UAE’s President Sheikh Mohamed bin Zayed Al-Nahyan.

Later that day, the chancellor will travel to gas-rich Qatar to hold talks with Emir Sheikh Tamim bin Hamad Al-Thani.

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Germany snapping up Indian fuels amid Russia sanctions

German imports of refined oil products from India soared in the first seven months of the year, official data showed Tuesday, much of which was likely made using crude oil from sanctions-hit Russia.

Germany snapping up Indian fuels amid Russia sanctions

Germany bought 451 million euros’ ($480 million) worth of Indian petroleum products between January and July.

That was an increase of more than 1,100 percent on the €37 million spent over the same period a year earlier, national statistics agency Destatis said.

The 12-fold jump comes after India became a leading buyer of Russian crude in the wake of Moscow’s invasion of Ukraine in February 2022.

India’s fuel exports to Germany were “mainly gas oils used for the production of diesel or heating oil”, statistics agency Destatis said.

Destatis noted that these products were derived from crude oil and that according to the UN Comtrade database, “India has been importing large quantities of crude oil from Russia” since the start of the war.

Western countries have hit Russia with a slew of sanctions over the war, including a European Union embargo on seaborne oil deliveries from Russia.

The EU — along with its G7 partners — also agreed to a price cap of $60 per barrel for Russian crude exported to other parts of the world.

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The measure has allowed India to snap up discounted crude from Russia before refining it and selling it to European customers.

While these sales are legal, critics say they amount to a backdoor route for Russian oil and undermine the impact of the sanctions, which are aimed at stripping Moscow of revenues to fund its war effort.

The EU’s foreign policy chief Josep Borrell acknowledged “the dilemma” in a blog post in May.

“We in the EU don’t buy Russian oil, but we buy the diesel obtained by refining this Russian oil somewhere else. This has the effect of circumventing our sanctions,” he wrote.

“All this does also raise moral issues,” he added.