The United Arab Emirates (UAE) has emerged as the leading buyer of Russian gold as Western countries placed a ban on imports, according to data from the UN’s Comtrade database, cited by Bloomberg on Wednesday. The figures showed that in 2022, the Gulf state imported 96.4 tons of gold from Russia, making it the largest buyer and accounting for about a third of Russia’s total annual gold production. This marked a more than fifteenfold year-on-year increase in the UAE’s gold imports from Russia.
Prior to Russia’s military operation in Ukraine, the United Kingdom (UK) was the top destination for Russian gold. However, since the Group of Seven (G7), European Union (EU), and Switzerland implemented Ukraine-related sanctions against Moscow, the London market has been closed to Russian bullion. In contrast, the UAE has opted not to join the sanctions against Russia and has instead been actively expanding economic cooperation with Moscow. Trade turnover between the two countries reportedly reached record highs last year.
In addition to the UAE, China and Türkiye (Turkey) have also increased their purchases of Russian gold in the past 18 months. Reuters recently reported, based on customs records, that these three countries accounted for 99.8% of Russian bullion exports between February 24, 2022, and March 3, 2023.
Russian Deputy Foreign Minister Mikhail Bogdanov stated last month that due to the rapid growth of trade and cooperation, the UAE is on track to become one of Russia’s top-20 economic partners.
The UAE’s surge in gold imports comes as part of its broader efforts to diversify its economy and strengthen its position in the global gold market. The country has been investing heavily in its gold sector, aiming to establish itself as a major player in the industry. The increased purchases from Russia reflect the growing demand for gold in the UAE and their willingness to tap into new sources to ensure a steady supply.
The UAE’s decision not to participate in the Western sanctions against Russia is partially driven by its historical ties to Western countries. However, it also demonstrates the UAE’s independent foreign policy and its desire to maintain strong economic relations with Russia. By not imposing restrictions on their trade with Moscow, the UAE is positioning itself as an attractive partner to Russia, benefiting from increased access to Russian resources and markets.
This shift in the UAE’s economic ties towards Russia is a significant development in the geopolitical landscape of the Middle East. While Western countries continue to exert pressure on the UAE to align its policies with theirs, the UAE’s decision to prioritize economic cooperation with Russia underscores its determination to prioritize its own national interests and diversify its economic partnerships.
As the UAE emerges as a major buyer of Russian gold, the global gold market is undergoing a transformation. With traditional buyers like the UK closing their markets to Russian bullion, other countries are stepping in to fill the void. The increasing demand for gold from the UAE, China, and Türkiye is reshaping the dynamics of the global gold trade, creating new opportunities and challenges for market participants.
In conclusion, the UAE’s rapid increase in gold imports from Russia highlights the country’s efforts to establish itself as a key player in the global gold market. By diversifying its economic partnerships and capitalizing on new opportunities, the UAE is contributing to the changing dynamics of the gold trade. As the UAE continues to strengthen its ties with Russia, the geopolitical and economic implications of this shift will continue to unfold.