The first shipment of Russian oil is sold to Pakistan.
Islamabad’s target is to buy 100,000 barrels per day.
As part of a new agreement between Islamabad and Moscow, Pakistan has made its first order for discounted Russian crude oil, according to Minister of State for Petroleum Musadik Malik in ISLAMABAD. The first shipment is expected to arrive at Karachi Port in May.
As a result of the situation in Ukraine, western markets have blocked Russian oil, thus Pakistan’s acquisition provides Russia with a fresh outlet for its petroleum in addition to rising sales to India and China.
Pakistan is facing a balance of payments problem and severely low foreign exchange reserves, so the discounted crude is a welcome relief. The country’s primary source of foreign exchange is the purchase of imported energy.
Malik told Reuters on Wednesday night that if the first transaction goes through properly, imports into Pakistan might exceed 100,000 barrels per day. This does not include processed fuels, but just crude oil.
“Our orders are in, we have placed that already,” he added, confirming rumours based on reliable sources that the government will be purchasing just crude oil and no finished goods.
Kpler statistics indicated that in 2022, Pakistan bought 154,000 barrels of oil per day, which was not much different from the previous year. Saudi Arabia, the world’s largest exporter, supplied the majority of the crude, followed by the United Arab Emirates. A significant decline in Middle Eastern suppliers to Pakistan is possible if Russian oil shipments reach 100,000 barrels per day.
When asked whether Chinese yuan and UAE dirham will be used as substitutes for dollars because Pakistan is low on the former, Malik declined to comment. He also remained silent about the volume of imports.
“I will not discuss the business aspects of the deal at this time,” he stated. According to him, the Russian crude would be refined in a trial run at Pakistan’s Refinery Limited (PRL), then at Pak-Arab Refinery Limited (PARCO), and finally at other refineries.
Nikolay Shulginov, the Russian minister of energy, sent a trip to Islamabad in January to discuss the agreement, and he later predicted that oil shipments to Pakistan would begin sometime in March. Malik took a proposal to Moscow in December of last year to begin talks on the agreement.
Traders and Reuters estimates show that India and China have been paying prices beyond the $60 per barrel threshold that Western nations have imposed for anybody to buy Russian oil as part of sanctions against Moscow.
