ISLAMABAD: The commercial banks in Pakistan have refused to facilitate oil import from Russia in the wake of economic sanctions imposed by the United States, UK United Kingdom and the European Union.
These countries have imposed ban on Russian oil imports against Moscow’s invasion of Ukraine.
Banks have stated to their oil importing giants that they cannot make payments in US dollars against Russian oil imports due to sanctions. If the government manages to enter a government-to-government agreement with Russia for the import of crude oil under transaction mode based on the rubles — ensuring no impact of sanctions on Pakistan — the refineries can utilise crude oil up to 15-30%, keeping in view its technical suitability for making finished products, Geo News reported today.
Refineries in Pakistan have already signed short and long-term agreements with Abu Dhabi National Oil Company (ADNOC), Aramco, and Kuwait Petroleum Corporation (KPC) for crude oil imports.
Also, the transportation cost for imports from Russian ports is estimated around $3-3.5 million compared to the current freight of $0.8-1.0 from the Middle East ports while the sea voyage from the Black Sea would take 16-26 days in comparison with 4-5 days from the Middle East.
This means that the freight charges, from Russia’s ports to Karachi, stand at $8 per barrel which is 8-12 times higher in comparison to the United Arab Emirates (UAE) ports.
