Petroleum Division of Pakistan is making an effort to buy Russian crude oil for about $50 per barrel, which is at least $10 per barrel less than the G7 price cap set on this valuable commodity coming from Russia as a result of its conflict with Ukraine. Now, a barrel of crude oil costs $82.78 on the worldwide market.
Moscow is largely focused on completing all requirements before entering into an agreement with Pakistan, such as choosing the mode of payment, shipping costs with a premium, and insurance costs, according to officials taking part in the virtual negotiations with Russia. According to these individuals, who spoke on the condition of anonymity, Russia would answer about the base price discount once the requirements are completed. Also, they said it would take 30 days to transfer the crude oil from Russian ports, which would boost the price per barrel by $10 to $15.
The negotiations between Moscow and Islamabad are moving forward favorably, and it is anticipated that a government-to-government agreement on the import of Russian crude oil will be completed by the end of March. When questioned, representatives said that the government had chosen not to reveal the payment method used to pay Russia for the import of crude oil, but that either Russian or Pakistani tankers might be used as a substitute.
An official advised that because the crude vessel will arrive in 30 days, the landed cost of Russian crude must be taken into account and will result in a per barrel shipping cost of $10–15. They said that Moscow has not yet approved the discount and that the shipping costs for the crude oil might outweigh the maximum discount.
In a recent press conference, State Minister Musadik Malik asserted that Pakistan will obtain a 30% discount on Russian crude oil. The government intends to buy one ship of Russian crude oil to compare the landed price to the current price of crude imported from Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates.
According to Geo, the secretary for the petroleum division is currently in Karachi to continue discussions with the top executives of Pak-Arab Refinery Company Limited (PARCO), Pakistan State Oil (PSO), Pakistan Refinery Limited (PRL), and other refineries about the import of Russian crude oil for processing into finished products. Pakistan will authorize Russian oil cargos within a month if the cost of the test ship is low enough to lower the cost of fuel, oil, and lubricants.
Pakistan will pay Russia in the currencies of friendly nations including China, Saudi Arabia, and the United Arab Emirates due to a shortage of US dollars. The National Insurance Company Limited (NICL) and Pakistan Reinsurance Company Limited would insure the ship carrying Russian crude, according to the officials (PakRE). Due to G7 constraints, the State Bank of Pakistan (SBP), which was previously apprehensive about dealing with Russian banks, has now signaled a willingness to speak with the Russian counterpart bank about a payment system for oil imports in three different currencies.