ISLAMABAD: Pakistan has placed its first order for discounted Russian crude oil under a new deal signed between Islamabad and Moscow, the country’s petroleum minister confirmed, with one cargo to dock at Karachi port in May.
Pakistan’s purchase will add to Russia’s growing sales to India and China, as Moscow shifts volumes from western markets where it faces a ban on its oil in the wake of the Ukraine conflict.
Discounted crude offers much needed relief to cash-strapped Pakistan amid a balance of payments crisis and dwindling foreign exchange reserves.
Energy imports form the majority of Pakistan’s external payments.
As per the deal, Pakistan will only buy crude oil, not refined fuels, with imports expected to reach 100,000 barrels per day if the first transaction goes through smoothly, State Minister for Petroleum Musadik Malik told Reuters late Wednesday.
Malik said Pakistan’s Refinery Limited will initially refine the Russian crude in a trial run, followed by Pak-Arab Refinery Limited and other refineries later.
Last year, Pakistan imported 154,000 barrels per day of oil, relatively flat from 2021, according to data from analytics firm Kpler. Most of the crude was supplied by the world’s top oil exporter Saudi Arabia followed by the United Arab Emirates.
Russian Energy Minister Nikolay Shulginov led a delegation to Pakistan in January to hold talks on the deal, after which he said oil exports to the South Asian country could begin after March.
