Relations between Russia and the UAE have deepened as a result of Russia’s severe economic crisis, which has caused an influx of cash from the warring country into Emirati markets and economy, Wall Street Journal (WSJ) reported.
The UAE’s closest security ally, the US, has expressed concern about the warming relations; and as per reports, Russian money has become important to the Emirati economy.
Inflow of Russians in UAE
Banks in the UAE are hiring personnel from Moscow to manage an inflow of Russian money. More Russian oil and gold are being traded in Dubai than ever before. And Russian buyers, who frequently trade in cash, fuel this city’s real-estate boom.
According to a WSJ report, in the last year, tens of thousands of Russians have moved to the UAE, making the Russian-speaking group one of the most prominent in a country of almost nine million people. The majority of these Russians are not sanctioned.
The report mentions some of Russia’s elite, including Igor Sechin, an ally of Vladimir Putin, who runs a state oil company and was recently in Dubai on business despite being blacklisted by the US and much of Europe.
Emirates NBD, Dubai’s primary government-owned bank, has reportedly persuaded bankers from Russian financial institutions to establish a unit specialised in managing money from wealthy Russians.
According to data from real-estate company Betterhomes, Russians were the third-largest property buyers in Dubai in the second quarter of 2023, up from the ninth position in 2021.
A year and a half into the Ukraine conflict, UAE emerge as a prominent ally of Russian Oil & money.
— Speak For Rights (@SpeakForRights) August 21, 2023
Several thousand Russians have moved here in the past year, turning the Russian-speaking community into one of the most visible in the country.@raffpantuccihttps://t.co/7BSmVuZM1T pic.twitter.com/oW7FPBdlKa
UAE Imports Russian Oil, Gold
Bans on Russian oil in the US and Europe have directed Moscow’s most widely exported product to the UAE, which buys it at a discount and either resells it, or refines it, into products sold at market rates — a transaction that generally does not interfere with Western sanctions, the report noted.
According to Kepler statistics published by the WSJ on Monday, the UAE purchased a record 60 million barrels of Russian oil last year, bringing vast amounts of money into the Middle Eastern nation.
London-based Capital Economics claimed that foreign cash flowed into the UAE following Russia’s invasion, increasing approximately by 20% per month since May 2022 compared to the year before.
As per the report, US officials and advisers stated that they would not obstruct Russian oil transactions through the UAE as long as they adhere to a price restriction established by the G7 nations, which limits the cash received by the Kremlin.
Russian gold is now being traded in more significant quantities in Dubai. According to customs statistics compiled by ImportGenius, the UAE imported $4 billion in Russian gold between 24 February 2022 and 3 March this year, up from $61 million in 2021.
The report mentioned that the US and Europe have banned Russian gold imports, but this does not apply to UAE enterprises as long as they do not export to sanctioned nations.
Russians are buying up housing in the UAE.
— Sprinter (@Sprinter99800) April 14, 2023
According to Emirates Estate analysts, since the beginning of the year, Russian demand for real estate has skyrocketed by 56%. pic.twitter.com/5lRZohZga7
UAE’s Response
The UAE has stated that it is careful not to violate sanctions imposed on Russia by its Western partners over the war in Ukraine.
According to a UAE official, the government has a rigorous process to deal with sanctioned individuals and firms, and it is in constant contact with the US and the EU regarding the war’s repercussions for the global economy.
“The ongoing global climate has led to financial and investment inflows to the UAE, given the country’s reputation as a stable global investment hub,” the official added. “We will continue to take these responsibilities extremely seriously, especially given the current geopolitical landscape.”
According to the source, Emirati banks monitor compliance with sanctions imposed on Russia in order to prevent violations of international law.