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Russian Crude oil at $50 Per Barrel, Procure mulls By Pakistan

BUSINESS:According to sources the Petroleum Division is attempting to acquire Russian crude oil at a price of around $50 per barrel—at least $10 per barrel below the price cap imposed by the G7 nations on the price of the precious commodity that is  taken from Russia as a result of its war on Ukraine.

Globally, crude oil is currently sell for $82.78 per barrel.

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Officials who are participating in the virtual talks with Russia shared that Moscow is more interested in completing all of the requirements, such as the method of payment, the cost of shipping with premium, and the cost of insurance, before signing the agreement with Pakistan.

Anonymous officials told the publication that Russia will respond regarding the base price reduction once the prerequisites are finalize. They added that the transportation of crude oil from Russian ports will take 30 days, resulting in an increase of $10-15 per barrel.

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The talks between Moscow and Islamabad are moving in the right direction, and  a deal between governments on the import of Russian crude will  reached before the end of March.

To an inquiry, they said, the public authority has chosen not to reveal the method of installment to Russia against the import of unrefined petroleum. Nonetheless, specialists are thinking about whether they ought to utilize Pakistan Public Delivery Enterprise (PNSC) boats or Russian big haulers to ship the unrefined.

The official added, “We also have to keep in mind the landed cost of Russian crude as the crude vessel will arrive in 30 days, owing to which per barrel shipping cost would hover at $10-15.” Moscow has not yet agreed on the discount. We are concerned that the crude oil’s shipping costs will offset the maximum discount.

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Nonetheless, State Clergyman Musadik Malik had guaranteed in a question and answer session that Pakistan would get a 30% rebate on Russian raw petroleum.

The government would import one ship of Russian crude oil to compare the landed cost to the cost of crude imported from Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates.

The secretary of the Petroleum Division is in Karachi to discuss the import of Russian crude oil for processing into finished goods with the top executives of Pak-Arab Refinery Company Limited (PARCO), Pakistan State Oil (PSO), Pakistan Refinery Limited (PRL), and other refineries.

In the event that the cost of the test ship is low enough to lower the prices of petroleum, oil, and lubricants, Pakistan will approve Russian oil cargoes in a month.

Pakistan would pay Russia in the currencies of friendly nations like China, Saudi Arabia, and the United Arab Emirates because of a liquidity crunch caused by the US dollar.

The ship carrying Russian crude, according to the officials, will  insured by Pakistan Reinsurance Company Limited (PakRE) and National Insurance Company Limited (NICL).

Due to G7 restrictions, the State Bank of Pakistan (SBP) was previously reluctant to conduct business with Russian banks. However, it has now indicated that it is willing to discuss a payment method for oil imports in three currencies other than dollars with the Russian counter bank.