Large 'Losses' for Middle East Sovereign Wealth Funds Due to Sanctions on Russia

[Asia Economy Reporter Yoo Hyun-seok] Major foreign media reported that sovereign wealth funds from the Middle East, which invested in Russia, suffered massive losses due to Western sanctions on Russia.

According to sovereign wealth fund information provider 'Global SWF' on the 6th, the Qatar Investment Authority (QIA), Qatar's sovereign wealth fund, is estimated to have incurred losses of $6.4 billion (approximately 7.703 trillion KRW) from investments in Russia since the beginning of this year.

The value of Russian assets held by the Qatar Investment Authority decreased from $16 billion at the end of last year to $9.6 billion as of the 1st of this month.

The Qatar Investment Authority mainly invested in stocks of companies such as the state-owned oil company Rosneft and the state-owned bank VTB Bank. This is because the stock prices of these companies have plummeted by about 50% in the past month.

VTB Bank was an early target of U.S. sanctions and was recently expelled from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment network. Western energy companies have also recently begun severing ties with Rosneft, such as British Petroleum (BP) in the UK deciding to sell its stake in Rosneft.

According to estimates by Global SWF, the Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund of Abu Dhabi, United Arab Emirates (UAE), also suffered losses of $600 million (approximately 722.2 billion KRW) during the same period.

Foreign media reported that sovereign wealth funds from Middle Eastern countries have increased their investments in Russia over recent years. As a result, the Russian assets held by these funds accounted for 69% of the Russian assets held by sovereign investment institutions worldwide as of March.

The deepening economic relationship between the Middle East and Russia is partly due to Middle Eastern countries believing that U.S. attention is shifting from the Middle East to Asia.

In particular, last year's U.S. withdrawal from Afghanistan strengthened this belief, leading Middle Eastern countries to become closer to Russia and China, foreign media pointed out.

This content was produced with the assistance of AI translation services.