First Cargo Of Russian Crude Oil May Delay To Next Month

Uk import
ISLAMABAD:After the latter agreed to the former’s request to import a single cargo first as a test case to bridge the “trust deficit,” the first russian crude oil cargo from Russia is anticipated to arrive in Pakistan by the end of April.Moscow has already made an offer to send 100,000 barrels of crude oil to Islamabad every day.

If the two countries reach an agreement, Russia will become Pakistan’s second-largest crude oil supplier, following Saudi Arabia, which also exports around 100,000 barrels of oil per day.

Russia “has raised doubt over the seriousness of Pakistan to mature the oil deal,” according to sources. As a result, Moscow had asked Islamabad to import “one oil cargo” as a test case during a recent meeting between the two countries.

According to the sources, Pakistan agreed to export blended oil to Russia because it lacked the technology to refine heavy crude oil.

Also Read :50,000MT Russian Wheat Arrived Gwadar Pakistan

However, in order to demonstrate trust in the oil deal, Moscow requested that Islamabad import “one crude oil cargo” first.

According to sources, Islamabad agreed to import “one crude oil cargo” by the end of April this year in response to a request from Russia, paving the way for a larger deal.

Mode of payment Pakistan may find it difficult to pay for Russian crude oil in the same currency as it faces a dollar crunch.

Prior, an unfamiliar organization had offered a Pakistani processing plant to import Russian raw petroleum however the Pakistani banks had wouldn’t make installment.

In exchange for Pakistan’s crude oil supplies, Russia has now agreed to receive payment in three currencies: UAE dirham, Chinese yuan, and Russian ruble.

According to sources, the State Bank of Pakistan (SBP) and the Russian counter bank were contemplating a three-currency alternative payment method for the oil import.

Also According to sources, Pakistan planned to establish a new Special Purpose Vehicle (SPV) company that would be in charge of bringing Russian oil into Pakistan’s refineries.

This will be a state-owned business that will also deal with Russia regarding all oil import and payment issues.

The price of Russian oil has skyrocketed since Russia attacked Ukraine, and the countries of the European Union now face the possibility of running out of petroleum products this year.

Additionally, there were reports that global diesel stocks were rapidly diminishing.

The opening of LCs has recently been a problem in almost all Pakistani industries.

According to experts, Pakistan will feel a great deal of relief if it is able to make the oil deal with Russia and pay in currencies other than the dollar.

While  Islamabad had previously desired to conclude the oil deal with Moscow at the maximum price limit set by the G-7 nations.

Even so, Pakistan and the United States had come to an agreement on the issue.

However, Russia’s President Vladimir Putin had made it clear that they would not do business with a nation that wanted to import oil at a price cap.

The authorities in Pakistan had previously stated that Islamabad would purchase crude oil from Russia at a 30% discount. Russia, on the other hand, denied any such change.

Pakistan and Russia had not yet agreed on a price for Russian crude, according to sources, adding that Islamabad hoped to receive “good discounts” from Moscow.