KARACHI: Pakistan is just one step away from finalizing a crude oil loan deal as a Russian team arrived in the port city to hold talks with the counterparts in the Pakistan State Oil, the sources said on Thursday.
The Russian delegation is also here to finalize the government to government agreement regarding the crude oil.
As the deal is completed, Pakistan will place an order for crude oil purchase from Russia, with the Russian ship expected to arrive in 26 days, most probably by mid-May.
The current Brent price in the international market is $85.16 per barrel, whereas Russian oil is available at $47-48 per barrel.
The technical teams of the Operational Services Centre (PSC), a Russian state-owned entity, held talks last week with the PSO team for two days on March 21-22. The talks, however, concluded with zero progress on the constitution of the Special Purpose Vehicle (SPV), responsible for not only importing the crude but also for the payments.
According to the reports, the Central Bank asked some local banks, including the National Bank of Pakistan (NBP), to open letters of credit for importing Russian oil but they were reluctant to do so o because of the G7 countries’ regulations of following the price cap of $60 per barrel or below it and making payments under Society for Worldwide Interbank Financial Telecommunications (SWIFT) arrangement.
PSO has never imported crude oil before, as it only imports finished petroleum products from various sources and diesel from KPC (Kuwait Petroleum Company).
Refineries have been importing crude under long-term agreements from ADNOC and Saudi Aramco. However, in the case of Russian crude, refineries will not be involved in the import, but it will be SPV with representatives from PSO and PSC.
The officials hinted that Pakistan may get Russian crude at a discount close to $50 per barrel, $10 per barrel below the cap price imposed by G7 countries on Russian oil in the wake of the war on Ukraine.
Russian delegation in Pakistan to hold talks on oil import deal
