First cargo of Russian oil to reach Pakistan in May

Pakistan has entered into a commercial deal with Russia to import discounted crude oil, with the first cargo expected to arrive in May. State Minister for Petroleum Musadik Malik confirmed that only one cargo would be imported as a test case to establish trust between the two countries.

For now Pakistan has agreed to import only crude oil, not refined fuels, with imports expected to reach 100,000 barrels per day if the first transaction is successful. Payment will be made in Russian rubles, Chinese yen, and UAE dirham, although the minister did not reveal the mode of payment for this particular cargo.

Pakistan’s Refinery Limited (PRL) will initially refine the Russian crude in a trial run, with Pak-Arab Refinery Limited (PARCO) and other refineries joining later. However, in July 2022, Pakistan’s five oil refineries expressed concerns about the deal, stating that only up to 30% of Russian crude could be processed locally due to technical and operational constraints. The oil refineries have also raised concerns about how their payments will be processed as Russian banking channels are closed for international payments for now.