Pakistan is following a long-term oil deal with Russia to import 1 million tonnes of Russian oil per year, which is about 20,000 barrels per day. The move comes after Russian oil exports were banned from European markets due to the attack on Ukraine. Pakistan aims to take advantage of opportunities to buy Russian oil at discounted prices.
The first shipment of crude oil from Russia reached Pakistan in June and talks are ongoing for another government-to-government cargo. In a major development, Cnergyico, a Pakistan-based refiner, recently imported the country’s first private sector shipment of Russian crude oil.
Pakistan’s Caretaker Energy Minister Muhammad Ali has been at the forefront of these efforts to secure a long-term oil deal with Russia. He highlighted the need to diversify Pakistan’s energy supply and reduce its import bill, which includes a large share devoted to oil and energy. This is particularly important for Pakistan as it faces a balance of payments crisis, declining foreign reserves, and significant economic challenges including high inflation and foreign exchange problems.
Additionally, Pakistan is facing difficulties in securing spot purchases of liquefied natural gas (LNG) due to price hikes due to Russia’s invasion of Ukraine. These challenges have led to power outages in the country, increasing its energy woes.
In response to these energy concerns, Pakistan LNG Limited (PLL), a government subsidiary responsible for procuring LNG from the international market, recently in December awarded a tender to commodity trader Vitol for the delivery of This marks Pakistan’s first LNG purchase in more than a year, aimed at easing gas shortages as winter approaches.
The Pakistani government is actively seeking opportunities to strengthen its energy security and reduce economic pressures caused by high import costs, thereby increasing its overall economic stability and energy resilience. This move marks an important step in Pakistan’s efforts to diversify its energy sources and establish a long-term partnership with Russia in the field of energy imports.
