ISLAMABAD: Pakistan and Russia are on the verge of concluding a historicoil sector agreement that promises to reshape bilateral energy cooperation,as ongoing discussions between the two nations’ energy ministries focus onexploration, production, refining, and potential infrastructure upgrades.This development comes at a time when Pakistan seeks to diversify itsenergy imports for cost reduction and enhanced security, while Russia aimsto expand markets amid Western sanctions. Finance Minister MuhammadAurangzeb recently highlighted Russia’s strengths in these areas,expressing Islamabad’s keen interest in formalizing such collaboration.
The talks build on Pakistan’s initial imports of Russian crude oil thatbegan in 2023, which have gradually increased to help alleviate thecountry’s chronic balance-of-payments pressures and high import bills.Russian crude has offered competitive pricing, often settled in alternativecurrencies such as Chinese yuan, bypassing traditional dollar-basedtransactions. These imports marked a strategic pivot for Pakistan, whichhas historically relied on Middle Eastern suppliers like Saudi Arabia andthe United Arab Emirates, but now looks to Russia for more affordable andreliable supplies amid global energy market volatility. Reportedly Indiahas conveyed concerns to Russia as earlier such concerns were also conveyedto India over purchase of jet engines for Pakistan Air Force JF-17 Figherjets but Moscow continued with the deal.
Recent high-level engagements, including meetings at energy forums inRussia and the 10th Pakistan-Russia Intergovernmental Commission inIslamabad in November 2025, have reinforced commitments to broadencooperation. Discussions have encompassed not only crude oil trade but alsoopportunities in liquefied natural gas and liquefied petroleum gasframeworks, alongside technical collaboration in hydropower and renewables.Russian Energy Minister Sergei Tsivilev has indicated interest from Russianfirms in upgrading an existing refinery in Pakistan, a move that couldmodernize local processing capabilities and reduce dependency on importedrefined products.
The proposed agreement extends beyond immediate imports to long-term jointventures in oil exploration and production. Pakistan’s recent auction ofoffshore blocks attracted international interest, and Russian expertisecould prove invaluable in developing these resources. Such partnershipswould align with Russia’s push to redirect energy exports toward Asia andSouth Asia, where demand remains robust despite geopolitical constraints.Analysts note that formalized cooperation could lead to technologytransfers, efficiency improvements, and investments that benefit botheconomies.
This deepening energy nexus has drawn attention from regional players,particularly India, which has historically maintained close defense andenergy ties with Russia. Earlier concerns emerged when Russia agreed tosupply advanced RD-93MA jet engines for Pakistan’s JF-17 fighter jets, adecision that prompted criticism in New Delhi over potential shifts inMoscow’s strategic priorities. While Russian sources have downplayed anyintent to undermine India-Russia relations, the oil talks add another layerto these sensitivities, as India itself continues substantial purchases ofRussian crude despite international pressures.
For Pakistan, the agreement represents a critical step toward energysecurity and economic stabilization. With fuel costs forming a majorportion of import expenditures, discounted and diversified supplies fromRussia could ease inflationary pressures and support industrial growth.Broader industrial talks, including potential collaboration on steelplants, suggest the partnership may evolve into multifaceted economicengagement, fostering mutual benefits in trade and infrastructure.
Experts emphasize that challenges remain, including logistical issues suchas port capacity, refining compatibility, and payment mechanisms. However,the momentum from recent intergovernmental sessions indicates strongpolitical will to overcome these hurdles. The upcoming 11th session of thecommission in Russia in 2026 is expected to further solidify theseinitiatives, potentially leading to concrete agreements that enhancebilateral trade volumes, currently under $1 billion.
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In summary, the impending oil sector pact underscores a maturing strategicrelationship between Pakistan and Russia, driven by pragmatic economicneeds in a shifting global landscape. As both countries navigate externalpressures, this cooperation could serve as a model for South-Southpartnerships in energy and beyond.
Source: https://www.dawn.com/news/1961445
Tags: Pakistan, Russia, Gazprom, JF-17
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