Pakistan will pay for the Russian oil with Chinese Yuan, and the test cargo, which carries 750,000 barrels of crude, is expected to dock in June.
Additionally, a senior official from the Ministry of Energy told the publication that the cargo may also arrive by the end of May.
Sources indicate that the Bank of China may facilitate the transactions.
However, the official declined to disclose specific details about the mode of payment and the exact discount, stating that it is not in the interest of the country.
The seller is also hesitant to make this information public, as other countries buying Russian oil directly from Moscow may react negatively.
“Russia will provide URAL crude in the test cargo and most probably Pakistan Refinery Limited (PRL) will be tasked to refine the Russian crude,” he added.
Pakistan’s economy
Although the refining process will require further verification, the commercial analysis of Russian crude will benefit Pakistan’s economy.
Estimators predict that the shipping cost for Russian oil will amount to approximately $15 per barrel.
According to undisclosed sources, Pakistan has agreed to purchase Russian oil at a per barrel price of $50-52, which is lower than the cap price of G7 countries at $60 per barrel.
Historically, Pakistani refineries have obtained 80% of their crude under long-term agreements with ADNOC and Saudi Aramco, leaving a cushion of 20% to purchase Russian oil under GtG agreements.
However, the government intends to maintain some buffer to acquire crude from the international market, as crude prices can fall below the cost agreed upon under long-term agreements.
Prime Minister Shehbaz Sharif announced that Pakistan is ready to receive a shipment of discounted Russian oil.
Petroleum Minister Musadik Malik informed that Pakistan had made its first purchase of cut-price Russian crude.
This discounted purchase comes as a much-needed relief for cash-strapped Pakistan, which has been working to avoid a balance of payments crisis while waiting for an IMF deal.
Pakistan places first order for discounted Russian crude Oil
Pakistan has placed an order for the first shipment of discounted Russian crude oil.
The order will reach the port of Karachi in May.
According to the deal agreed between Moscow and Islamabad, Pakistan would only buy crude oil and not processed fuels.
Pakistan will import up to 100,000 barrels per day (bpd) if the initial transaction is successful.
US Not Against Pakistan-Russia Oil Deal
A few days after Pakistan placed the order, the Biden administration said that it wouldn’t protest Pakistan’s discounted purchase of Russian oil.
Each nation has the freedom to determine its own energy supply policies, a US State Department official said to reporters in Washington when asked to comment on Pakistan’s choice.
