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Islamabad Places First Order for Russian Oil: Pakistan Minister
Islamabad Places First Order for Russian Oil: Pakistan Minister
Sputnik India
India, Pakistan's neighbor, is currently South Asia's largest importer of Russian crude, with New Delhi's imports standing at 1.64 million barrels per day last month.
2023-04-20T17:45+0530
2023-04-20T17:45+0530
2023-04-20T19:31+0530
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Islamabad has ordered its first consignment of discounted Russian oil after the former inked a deal with Moscow, Pakistan's Junior Petroleum Minister Musadik Malik has reportedly said.The minister added that the first cargo from Russia would reach the port city of Karachi in May.Malik revealed that Islamabad was only buying crude from Russia, and that refined oil wasn't part of the agreement.The minister, however, asserted that Pakistani imports of Russian oil are expected to touch the 100,000 barrels per day mark if payment mechanisms unfold successfully.Unlike India, Pakistani refineries don't have the capacity to refine large volumes of Russian crude.That's why Pakistan Refinery Limited (PRL) would be the only facility that would refine oil from Russia while other refineries would join later after undergoing trial runs.Islamabad's deal for discounted Russian oil comes months after Finance Minister Ishaq Dar said that Pakistan was looking to purchase crude from Moscow at rates considerably lower than Brent crude in the international market.Dar even cited neighboring India's example. India has become one of Russia's biggest trade partners, with New Delhi's crude purchases hitting an all-time high in March. Besides, India's overall imports from Russia have surged by nearly 400% to $39.8 billion in the past twelve months.At the start of 2023, Russian officials had discussions with Pakistani authorities in Islamabad after which the two sides said that the contract would be signed in March.Why Discounted Russian Oil is Crucial for PakistanAccording to Pakistani media reports, Pakistan will pay around $50 a barrel for its purchases from Russia, which is comparatively quite less than the $79 per barrel it would be paying to buy Brent crude as of April 20.This is vital for Pakistan, given that the country is reeling under one of its worst economic crises in decades.With slightly over $4 billion in forex reserves, Pakistan has only enough currency to sustain four weeks of imports and desperately needs fresh funds to avert a sovereign default.The cash-strapped nation is also in talks with the International Monetary Fund (IMF) for the disbursal of a fresh tranche of $1.1 billion under a $7 billion loan programme. However, talks between the global lender and the Pakistan government have remained stalled for months, and the IMF is yet to announce a date for the funds.
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Islamabad Places First Order for Russian Oil: Pakistan Minister
17:45 20.04.2023 (Updated: 19:31 20.04.2023) Pakistan's neighbor India is currently South Asia's largest importer of Russian crude, with New Delhi's imports standing at 1.64 million barrels per day last month.
Islamabad has ordered its first consignment of discounted Russian oil after the former inked a deal with Moscow, Pakistan's Junior Petroleum Minister Musadik Malik has reportedly said.
The minister added that the first cargo from Russia would reach the port city of Karachi in May.
Malik revealed that Islamabad was only buying crude from Russia, and that refined oil wasn't part of the agreement.
The minister, however, asserted that Pakistani imports of Russian oil are expected to touch the 100,000 barrels per day mark if payment mechanisms unfold successfully.
"Our orders are in, we have placed that already. Yes it is true that we will be getting only crude, not refined oil," Malik said.
Unlike India, Pakistani refineries don't have the capacity to refine large volumes of Russian crude.
That's why Pakistan Refinery Limited (PRL) would be the only facility that would refine oil from Russia while other refineries would join later after undergoing trial runs.
Islamabad's deal for discounted Russian oil comes months after Finance Minister Ishaq Dar said that Pakistan was looking to purchase crude from Moscow at rates considerably lower than Brent crude in the international market.
Dar even cited neighboring India's example. India has become one of Russia's biggest trade partners, with New Delhi's crude purchases hitting an all-time high in March. Besides, India's overall imports from Russia have surged by nearly 400% to $39.8 billion in the past twelve months.
At the start of 2023, Russian officials had discussions with Pakistani authorities in Islamabad after which the two sides said that the contract would be signed in March.
Why Discounted Russian Oil is Crucial for Pakistan
According to Pakistani media reports, Pakistan will pay around $50 a barrel for its purchases from Russia, which is comparatively quite less than the $79 per barrel it would be paying to buy Brent crude as of April 20.
This is vital for Pakistan, given that the country is reeling under one of its worst economic crises in decades.
With slightly over $4 billion in forex reserves, Pakistan has only enough currency to sustain four weeks of imports and desperately needs fresh funds to avert a sovereign default.
The cash-strapped nation is also in talks with the International Monetary Fund (IMF) for the disbursal of a fresh tranche of $1.1 billion under a $7 billion loan programme. However, talks between the global lender and the Pakistan government have remained stalled for months, and the IMF is yet to announce a date for the funds.
