Pakistan is considering entering into a long-term agreement to purchase a substantial amount of Russian oil, with estimates ranging from 0.7 million to 1 million tons per year, equivalent to up to 20,000 barrels per day (bpd).
This move comes as Pakistan seeks to capitalize on the opportunity to buy Russian crude oil at competitive prices after Russia’s exports to European markets were curtailed due to geopolitical reasons.
The first shipment of Russian crude oil arrived in Pakistan in June this year, and discussions for a second government-to-government cargo are currently underway. Additionally, a Pakistani refiner, Cnergyico, recently imported the nation’s first-ever private-sector shipment of crude oil from Russia.
Pakistan is facing economic challenges, including high inflation and a foreign exchange crisis, and it has also been grappling with elevated prices for spot purchases of Liquified Natural Gas (LNG) due to Russia’s invasion of Ukraine.
This situation has contributed to widespread power outages in the country. As a response to these challenges, Pakistan recently awarded a tender for the delivery of an LNG cargo to commodities trader Vitol, marking the country’s first spot purchase of LNG in over a year.
Furthermore, Pakistan is actively pursuing discussions with Russia to establish a long-term program for importing discounted crude oil, a move that aligns with the government’s strategy to diversify energy supplies while maintaining cost-effectiveness.
To facilitate these negotiations and foster collaboration on energy matters, a Pakistani delegation, led by the interim energy minister, was scheduled to participate in the Russian Energy Week 2023, held from October 11-13.
The event aimed to bring together key stakeholders and experts in the energy sector to explore opportunities for cooperation and address shared challenges.
Pakistan’s quest to secure reliable and affordable energy resources, particularly through agreements with Russia, signifies a strategic effort to enhance the country’s energy security, stabilize its economy, and meet the growing energy demands of its population.?