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Pakistan expects to receive in May its first cargo loaded with discounted Russian crude after placing its first order for oil from Moscow under a new bilateral deal, Pakistan’s Petroleum Minister Musadik Malik told Reuters.
For several months, Pakistan has been negotiating for the purchase of Russian crude at discounts. Pakistan hasn’t been a major importer of Russian oil and gas so far.
Last month, reports emerged that Pakistan is looking to buy Russian oil at $50 per barrel, as the South Asian country is grappling with an economic and foreign reserves liquidity crisis.
Pakistan is desperate to import energy at low costs after it was outspent on the market last year when oil and gas prices surged while Pakistani foreign exchange reserves dwindled.
A potential purchase of $50 oil from Russia would be $10 below the G7 price cap on Russian crude, below which shipments are still cleared to enjoy insurance and financing services from Western companies.
Pakistan hopes for “good discounts” from Russia, earlier reports have said.
Russia, for its part, was initially uncertain whether Pakistan would want to proceed with an oil deal, according to a report in The Express Tribune. Following a meeting between Russian and Pakistani officials, Russia has asked Pakistan to purchase and import one cargo as a test case.
This week, Pakistani minister Malik told Reuters that the country had already placed its orders and confirmed reports that Pakistan would buy only crude, not refined products.
The minister, however, declined to disclose any commercial details about the oil purchase.
Russian officials have advised Pakistan not to divulge to the media any details about the discount at which the South Asian country is buying Russian crude, nor the mode and the currency of the payment, sources told Pakistani news outlet Dunya News earlier this week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.