Wednesday, February 28, 2024

Pakistan places its first order of discounted Russian oil

Pakistan has made its first order for discounted Russian crude oil as part of a new deal between the two countries, according to State Minister for Petroleum Musadik Malik.

The purchase is for crude oil only, with imports expected to reach 100,000 barrels per day if the first transaction is successful.

Pakistan’s Refinery Limited will initially refine the Russian crude, with other refineries to be included after a trial run.

“Our orders are in, we have placed that already,” Musadik Malik told Reuters in an interview while highlighting that one cargo of the commodity will dock at the Karachi port in May.

The deal was first announced by Finance Minister Ishaq Dar last year, who said that Pakistan was exploring the possibility of buying discounted Russian oil, noting that India had already been purchasing oil from Moscow. Subsequently, Malik traveled to Moscow for talks on issues including oil and gas supplies, after which the government confirmed that it would purchase discounted crude oil, petrol, and diesel from Russia.

In January 2023, a Russian delegation visited Islamabad for talks to finalize the deal, during which the two countries addressed technical issues related to insurance, transportation, and payment mechanisms.

“After consensus on the technical specifications achi­eved, the oil and gas trade transaction will be structured in a way it has a mutual economic benefit for both countries,” a joint statement issued by the two sides had then stated.

The move is part of Pakistan’s efforts to reduce its reliance on Middle Eastern oil, and to diversify its sources of energy. It is expected to help Pakistan meet its energy needs and strengthen its economic ties with Moscow.

The step is also seen as a sign of Pakistan’s willingness to explore new relationships with other countries and to reduce its dependence on the US.

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