By Staff Reporter
KARACHI: Pakistan received its first shipment of Russian crude oil on Sunday under a new deal that aims to diversify its oil import sources and secure discounted rates from Moscow.
The oil tanker Pure Point, carrying 45,142 metric tons of crude, docked at the Karachi Port Trust’s oil berth OP2, port officials said.
Pakistan signed an agreement with Russia in April to buy crude at discounted rates as part of its efforts to reduce its dependence on Middle Eastern suppliers.
Russia sent a larger vessel carrying 100,000 metric tons of crude to the Omani port of Duqm, where it was split into two smaller shipments for Pakistan.
The second shipment of 50,000 metric tons is expected to arrive at Port Qasim on June 20, officials said.
The authorities decided to use smaller ships because Pakistani ports cannot accommodate heavy vessels carrying more than 50,000 tons of liquid cargo.
Pakistan Refinery Limited (PRL) will refine the Russian crude in a trial run and submit a test report to the government on its quality, yields and commercial viability.
The report will help the government assess the transportation and refining costs and margins for refineries.
Prime Minister Shehbaz Sharif said it was the first ever Russian oil cargo to Pakistan and the beginning of a new relationship between the two countries.
“Glad to announce that the first Russian discounted crude oil cargo has arrived in Karachi and will begin oil discharge tomorrow,” the prime minister said in a Twitter post.
Sharif said he had fulfilled another of his promises to the nation by securing the Russian oil deal.
“Today is a transformative day. We are moving one step at a time toward prosperity, economic growth and energy security & affordability.”
The arrival of the Russian oil cargo was delayed by technical and logistical challenges.
The vessel that left a Russian port on April 21 had to wait for 10 days due to a technical issue and then for another 12 days at Egypt’s Suez Canal due to a long queue.
The delay did not increase the transportation cost but could affect the country’s finances if the price of crude oil dropped in the meantime, officials said.
Pakistan has been actively seeking cheaper energy sources to address its crippling economic crisis, which saw its official forex reserves plummet to alarmingly low levels after dipping below $4 billion in recent months. To combat the situation, the government decided to curtail the country’s imports, which in turn slowed down the pace of the economy.
According to the Pakistan Bureau of Statistics, energy products constitute around 29 percent of the country’s total imports. Acquiring Russian crude oil at a discounted price has the potential to significantly reduce Pakistan’s import bill and create more fiscal space for the government.
Pakistan’s purchase gives Russia a new outlet, adding to Moscow’s growing sales to India and China, as it redirects oil from western markets because of the Ukraine conflict.
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