Monday, June 17, 2024

Pakistan to Get Cheaper Oil from Russia

Petroleum Division is trying to procure Russian crude oil at around $50 per barrel, at least $10 per barrel below the price cap imposed by the G7 countries on the precious commodity being taken from Russia due to its war on Ukraine, sources told The News on Sunday.
Currently, crude oil is being sold globally for $82.78 per barrel.

Officials, involved in the virtual talks with Russia, shared that Moscow is more interested in completing all the prerequisites such as the mode of payment, shipping cost with premium, and insurance cost before signing the agreement with Pakistan.

Officials, who spoke to the publication on the condition of anonymity, said that Russia will respond about the discount in base price after the prerequisites are finalised. They added that the shipping of crude oil from Russian ports will take 30 days which would mean $10-15 per barrel increase due to the transportation.

The talks between Moscow and Islamabad are going in a positive direction with the hope that a government-to-government deal on Russian crude import may be finalised before end of March.
To a question, they said, the government has decided not to divulge the mode of payment to Russia against the import of crude oil. However, authorities are considering whether they should use Pakistan National Shipping Corporation (PNSC) ships or Russian tankers to transport the crude.

“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,” the official said, adding that Moscow has not agreed on the discount yet. “We fear that the maximum discount would be offset by the shipping cost of the crude oil.”
However, State Minister Musadik Malik had claimed in a press conference that Pakistan would get a 30% discount on Russian crude oil.

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