It was reported that Russia had confirmed the availability of 100,000 barrels per day of crude oil supply to Pakistan.
The Russian Ministry of Energy and the Minister of State for Petroleum, as well as other public and private stakeholders, held an online meeting on Thursday, according to sources close to the development. The import of Russian energy-related products was on the agenda for this online video meeting.
According to sources, the meeting covered shipping, insurance, and financial arrangements for import of Russian energy related products. The meeting was attended by all senior stakeholders in the energy sector, from both the government and state-owned enterprises.
The agenda for the Pakistan-Russia Intergovernmental Commission (IGC) meeting, which will be held in Pakistan on the 19th and 20th of January 2023, was also discussed via online video meeting. Sources also told Profit that the Russian Energy Minister is expected to be part of the delegation that will visit in January.
An IGC is essentially a body made up of member states’ main and permanent secretaries that is in charge of developing development programmes and action plans. Under the condition of anonymity, the source stated that Russia has already expressed its willingness to offer crude oil at a 30% discount to Pakistan.
If this is the case, Pakistan is getting a very good deal. According to oilprice.com, the price of Urals oil on Tuesday was 54.42 dollars per barrel, which means Pakistan would receive a discount of 16 dollars per barrel, which could be significant depending on volume.
Because Russia’s Urals blend is currently trading below the $60 per barrel price cap imposed by western nations, it is possible to obtain a ship as well as the necessary financial and insurance services without too much difficulty.
However, because the Urals blend is a heavier oil, it has a higher density and is much more difficult to process if the refinery lacks the necessary machinery. According to reports, during the virtual meeting, Pakistani authorities also highlighted this fact to their Russian counterparts.
Informing them that domestic refineries can only process light crude oil, which is more expensive because it is easier to process, As a result, blending heavy and light oil would potentially raise the price per barrel above the price cap imposed by Western nations and their allies.
Earlier this month, it was reported that Russia had confirmed to a Pakistani delegation led by Minister of State for Petroleum Musadik Malik the availability of 100,000 barrels per day of crude oil supply to Pakistan.
A delegation from Moscow is expected to visit Islamabad in January to finalise the deal’s details, including rates and payment methods.
During a press conference held earlier this month, Minister of State for Petroleum Musadik Malik also said that Russia had confirmed the supply of petroleum products at a “discounted rate.” The minister also stated that fruitful discussions on pipeline projects, particularly the delayed Pakistan Stream Gas Pipeline, had taken place.