In Moscow, Mohammad Ali, Pakistan’s interim energy minister, announced onThursday that Islamabad is exploring the possibility of entering into along-term agreement to purchase between 0.7 million and 1 million tons(equivalent to up to 20,000 barrels per day) of Russian oil annually, asreported by the TASS news agency.
This move comes as Pakistan has been acquiring discounted crude oil fromMoscow following European market bans on Russian exports due to the Ukraineinvasion.
Pakistan’s initial shipment of this oil, facilitated by the government,arrived in June, and negotiations are in progress for a secondgovernment-to-government shipment.
Additionally, Pakistan’s first privately-imported Russian crude oil wasbrought in by the country’s refiner, Cnergyico, last week. The cost of oiland energy comprises a significant portion of Pakistan’s import expenses,and the nation is grappling with a balance of payments crisis caused bydepleting foreign reserves.
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Pakistan is also contending with the challenges of high inflation andforeign exchange constraints, exacerbated by the surge in liquefied naturalgas (LNG) prices following Russia’s Ukraine invasion, resulting inwidespread power shortages.
Earlier this month, Pakistan LNG Limited (PLL), a government-owned entityresponsible for LNG procurement from the global market, awarded a contractto commodities trader Vitol for the delivery of an LNG cargo in December,marking the country’s first spot purchase in over a year.