A technical delegation from Russia is scheduled to meet with officials from Pakistan State Oil (PSO) in Karachi to finalize a crude oil import deal at a government-to-government level (GtG).
The PSO has been nominated as the state-owned company on behalf of Pakistan for talks, and the Operational Services Center (PSC) has been nominated for talks by Moscow. If the talks are successful, both state-owned companies will sign the commercial agreement the next day.
According to sources within the industry, the current price of Brent crude has come down to $73 per barrel, whereas the Russian crude oil price remained at $52 in February 2023.
The sources urged Pakistan refineries to purchase Russian oil on their own, but the government is trying to secure a GtG deal below the $60/barrel price cap imposed by G7 countries. Under the GtG deal, the Petroleum Division wants to lock the deal at close to $50/barrel, $10/barrel below the cap price. Russia wants to confirm if Pakistan wants to purchase its crude, as there is no written direction from Pakistan’s top man to purchase the Russian crude.
The Russian side will finalize all prerequisites with PSO, including the mode of payment, shipping cost with premium, and insurance cost. The officials said that Russia’s PSC may offer a discount on the base price in its talks with PSO’s technical team. Shipping of crude oil from Russian ports would take 30 days, and an additional per barrel transportation cost would be $10-15/barrel.
Pakistan would pay Russia in the currencies of friendly countries, including China, Saudi Arabia, and the UAE, due to a US dollar liquidity crunch.
