November, 29, 2023
Pakistan makes its first purchase of discounted Russian oil

Pakistan makes its first purchase of discounted Russian oil

Infostani sources- Pakistan wants Russia to sign a long-term oil contract within the price limit of 60 dollars per barrel. For this purpose, the Pakistani delegation will leave for Russia on October 10. According to sources, the FOB price is “free on board” which means the actual price charged at the port. This means that Russia will also bear the freight cost of exporting the oil to Pakistan. Russia sent a shipment of 100,000 metric tons of crude oil to Pakistan within a month, covering the freight costs as well. The vessel was part of a trial. And Pakistan Refinery Limited (PRL) processed affordable crude oil at a cost of $7 per barrel.

Pakistan demanded more concessions in recent negotiations, but Russia 8 was not willing to pay more than a dollar per barrel. Now, the Pakistani side has developed a new formula to bring Russian crude oil to the price range of $60 per barrel. The US has signaled its approval for us to import Russian crude oil. But they’ve set a limit in line with what was announced for the G7 countries. EU, G7 countries and Australia

Pakistan makes its first purchase of discounted Russian oil

Challenges and Opportunities: Russia’s Oil Imports to Pakistan

The U.S. and its allies believed that Russia was boosting its oil revenues in the war against Ukraine.  But they announced the price cap to avoid disrupting the world’s oil supply. They intended to block Russian finance. The US wanted Pak and Ind to import Russian oil but on the limit announced by the European Union and G7. Now, Pakistan will ask Russia to supply crude oil at the same price that the US supports. Delay in long-term deal Pak and Russia had earlier agreed to set up a pipeline with the aim of importing crude oil from Russia. But that SPV was not set up, delaying the long-term deal with Russia.

Russia had also expressed serious concerns over Pakistan’s non-seriousness in the long-term crude oil deal. The Economic Decision-Making Body has taken into consideration the crude oil recently imported by (PRL) . The long-term trading plan was rejected. Importing oil from Russia was like gambling because the previous government did not make proper arrangements for importing crude oil from Russia. But it was fortunate that PRL made a profit of $7-8 per barrel from importing crude oil from Russia.

Experts say that if Pakistan regularly imports crude oil from Russia, it can benefit from it. It should be noted that after the shift of power plants to LNG. Pakistani refineries are facing difficulties in using furnace oil.

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