By Staff Reporter
ISLAMABAD: Pakistan has placed its first order for discounted Russian crude oil under a new deal struck between Islamabad and Moscow, with one cargo to dock at Karachi port in May.
Under the new deal, Pakistan will buy crude oil only and is expected to import 100,000 barrels per day if the initial transaction goes smoothly.
Reuters reported that the first cargo is set to dock at Karachi port in May.
Pakistan’s desire to find cheaper sources of energy has been fueled by its struggling economy, which has seen its official forex reserves dip below $3 billion and its currency undergo massive devaluation.
The country has already imported energy products worth $7.7 billion during the current fiscal year. In the last fiscal year, Pakistan’s energy imports were valued at $23.3 billion, constituting 29 percent of the country’s total imports.
The move comes after Russia agreed to supply crude oil and oil products to Pakistan at cheaper rates and signed several memoranda of understanding with the country’s Energy Ministry earlier this year.
Officials said Pakistan is making concerted efforts to procure Russian crude oil at $50/barrel, at least $10/barrel less than the price cap imposed by the G7 countries due to Moscow’s invasion of Ukraine.
The shipping of crude oil from Russian ports will take 30 days, resulting in an increase of $10-15 per barrel due to transportation costs. Pakistan will pay Russia in the currencies of friendly countries, including China, Saudi Arabia, and the UAE, due to a dollar liquidity crunch.
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