Pakistan could secure a crude oil deal with Russia on the desired discount rate if prime minister Shehbaz Sharif contacts Russian president Vladimir Putin directly on the matter, sources said on Friday.
Suffering from rising fuel costs since 2021, Pakistan has been deeply interested in buying around 100,000 barrels of Russian crude oil per day. If Pakistani refineries are able to "synchronise well" with blended Russian crude, then the purchase of crude from Russia could be increased in due course, sources in the petroleum division say.
As talks between Pakistan and the Russian Federation are ongoing, both sides are working to finalise a Memorandum of Understanding (MoU) or a protocol that could be signed today (Friday) at the end of three-day delegation-level talks.
It may be noted that the price of Russian oil is currently estimated between $70-75 per barrel in the international market, whereas Brent crude is near $81 per barrel. Pakistan hopes that it will get crude oil below $60 per barrel from Russia, under a government-to-government agreement. Such a price might also help Pakistan evade pressure from the West, who have imposed a 'price cap' on Russian energy exports.
Moscow has unequivocally communicated to Islamabad that it would announce the price of Russian crude for Islamabad once a memorandum of understanding (MoU) or governmental protocol for energy trade (crude oil, petroleum products, and liquefied natural gas) was signed.
Moscow believes that a signed agreement would show the seriousness of the Government of Pakistan towards energy trade with Russia, as the Eurasian power has been cut off from global markets since the Ukraine conflict erupted in March last year.
“Experts from Russia also asked Pakistan counterparts not to mention the price cap of $60 per barrel imposed on Russian oil by G7 countries while discussing the crude import,” the officials involved in the talks were eager to point out.
There has been no official decision yet on the discount in crude price, or the duration or validity of the government-to-government agreement, during the ongoing talks.
However, sources added that the issue of discounted crude oil, as desired by Pakistan, would invariably be decided by Russian President Putin if and when the Pakistani premier contacts him.
As far as the $3 billion Pakistan Stream Gas Pipeline (PSGP) is concerned, Pakistan is of the view that it will erect the pipeline, but links it to the supply of more LNG, and with infrastructure development at the port. Russia wanted to initiate the project, and finalise the shareholding arrangement under the existing intergovernmental agreement.
Overall, the officials said that the talks under the inter-governmental commission level are moving forward on a positive trajectory. How ever, officials noted that Russia will offer its price for crude oil to Pakistan only after the signing of the MoU on energy trade.
Meanwhile, Russian energy minister Nikolay Shulginov met Pakistani prime minister Shehbaz Sharif in Lahore on Thursday, where both discussed the possibility of Moscow supplying oil and gas to Islamabad. Shulginov is visiting Pakistan for the three-day annual inter-governmental commission meeting.
Federal ministers Sardar Ayaz Sadiq and Naveed Qamar flanked the Pakistani premier who held candid discussions with the visiting Russian minister.
Shulginov said that President Putin has referred to Pakistan as an important partner for Russia in South Asia and the Islamic world, and reiterated his strong interest in deepening the bilateral relationship.
The Pakistani premier and the Russian energy minister exchanged views on Russia supplying oil and gas from to Pakistan on a long-term basis. Matters related to the Pakistan Stream Gas Pipeline (PSGP) project were also reviewed.
Suffering from rising fuel costs since 2021, Pakistan has been deeply interested in buying around 100,000 barrels of Russian crude oil per day. If Pakistani refineries are able to "synchronise well" with blended Russian crude, then the purchase of crude from Russia could be increased in due course, sources in the petroleum division say.
As talks between Pakistan and the Russian Federation are ongoing, both sides are working to finalise a Memorandum of Understanding (MoU) or a protocol that could be signed today (Friday) at the end of three-day delegation-level talks.
It may be noted that the price of Russian oil is currently estimated between $70-75 per barrel in the international market, whereas Brent crude is near $81 per barrel. Pakistan hopes that it will get crude oil below $60 per barrel from Russia, under a government-to-government agreement. Such a price might also help Pakistan evade pressure from the West, who have imposed a 'price cap' on Russian energy exports.
'Show your seriousness'
Moscow has unequivocally communicated to Islamabad that it would announce the price of Russian crude for Islamabad once a memorandum of understanding (MoU) or governmental protocol for energy trade (crude oil, petroleum products, and liquefied natural gas) was signed.
Moscow believes that a signed agreement would show the seriousness of the Government of Pakistan towards energy trade with Russia, as the Eurasian power has been cut off from global markets since the Ukraine conflict erupted in March last year.
“Experts from Russia also asked Pakistan counterparts not to mention the price cap of $60 per barrel imposed on Russian oil by G7 countries while discussing the crude import,” the officials involved in the talks were eager to point out.
There has been no official decision yet on the discount in crude price, or the duration or validity of the government-to-government agreement, during the ongoing talks.
However, sources added that the issue of discounted crude oil, as desired by Pakistan, would invariably be decided by Russian President Putin if and when the Pakistani premier contacts him.
'Moving forward on a positive trajectory'
As far as the $3 billion Pakistan Stream Gas Pipeline (PSGP) is concerned, Pakistan is of the view that it will erect the pipeline, but links it to the supply of more LNG, and with infrastructure development at the port. Russia wanted to initiate the project, and finalise the shareholding arrangement under the existing intergovernmental agreement.
Overall, the officials said that the talks under the inter-governmental commission level are moving forward on a positive trajectory. How ever, officials noted that Russia will offer its price for crude oil to Pakistan only after the signing of the MoU on energy trade.
Meanwhile, Russian energy minister Nikolay Shulginov met Pakistani prime minister Shehbaz Sharif in Lahore on Thursday, where both discussed the possibility of Moscow supplying oil and gas to Islamabad. Shulginov is visiting Pakistan for the three-day annual inter-governmental commission meeting.
Federal ministers Sardar Ayaz Sadiq and Naveed Qamar flanked the Pakistani premier who held candid discussions with the visiting Russian minister.
Shulginov said that President Putin has referred to Pakistan as an important partner for Russia in South Asia and the Islamic world, and reiterated his strong interest in deepening the bilateral relationship.
The Pakistani premier and the Russian energy minister exchanged views on Russia supplying oil and gas from to Pakistan on a long-term basis. Matters related to the Pakistan Stream Gas Pipeline (PSGP) project were also reviewed.