March 27, 2023
Economy Pakistan

Pakistan Set to Receive First Oil Cargo from Russia by End of April

Pakistan is expected to receive its first-ever oil cargo from Russia by the end of April 2023, in what is being seen as a precursor to a much bigger deal between the two countries. According to a report in the Express Tribune, the oil cargo is being treated as a test case, as Russia has asked Pakistan to import a single cargo first to bridge the trust deficit between the two nations.

Despite Pakistan’s desire to import oil from Russia, the Russian side has doubts over Pakistan’s seriousness to conclude a deal that could see Russia become the second-largest crude oil supplier to Pakistan, after Saudi Arabia. As such, the request to import a single cargo first was made by the Russian side during a recent meeting between the two nations.

The Pakistani government has repeatedly claimed that Russia has agreed to provide crude oil and petroleum products to Pakistan at discounted rates. However, there has been no word on the discount that will be offered to Pakistan. It is worth noting that back in January, Minister of State for Petroleum Musadik Malik said that Pakistan and Russia had agreed to a late March timeline for the crude oil deal.

In addition to the discount issue, there are concerns about payment arrangements. However, Russia has agreed to receive payment in Russian ruble, Chinese yen, and UAE dirham against the supplies of oil to Pakistan. This should be a relief for Pakistan, as it seeks to diversify its oil imports away from reliance on the US dollar.

If the deal goes through, it could mark a significant shift in Pakistan’s energy policy. The country has traditionally relied on Saudi Arabia and other Gulf nations for its oil imports, and this deal would add Russia to the list of suppliers. For Russia, it could provide an opportunity to strengthen its ties with Pakistan, as it seeks to expand its reach in Asia.

The cargo does not signal the start of oil imports from Russia, but it is being viewed as a positive sign for the future. Pakistan hopes that the successful completion of this test case will lead to a much bigger deal with Russia, which could have significant implications for both countries. For Pakistan, it could help to address its energy needs, while for Russia, it could be an opportunity to expand its influence in a region that is strategically important.

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