On Sunday, Pakistan Refinery Limited (PRL) denied a claim that Russian crude oil imports had been halted due to processing challenges and said that negotiations for another spot agreement are underway.
“The Russian crude was successfully processed, and the spot deal was technically and commercially feasible,” PRL CEO Zahid Mir said in a written statement.
Last week, news broke that the import of Russian crude oil had been halted due to refining concerns at the refinery.
Mir stated that the PRL would process Russian crude oil again if suitable commercial terms become available, and that negotiations for another spot sale were ongoing.
According to sources in the energy sector, Pakistan has banned its imports of crude oil from Russia after the refining process produced more boiler oil than petrol.
According to the sources, the Pakistan Refinery declined to process extra Russian oil because it produced less petrol with 20% more boiler oil than Arabian crude oil.
They stated that the advantages of importing Russian crude oil were limited, with a greater quantity of furnace oil exported at a lower price.
According to some accounts, Russian oil produced less kerosene and jet fuel for ships, which was detrimental to the country.
Moreover, according to industry sources, Pakistan Refinery had given up refining Russian oil for now, despite the insistence of former state minister for petroleum Musadik Malik.
Two crude oil ships from Russia had arrived at the Karachi Port on June 11 and 26, after which no Russian oil ship came to Pakistan.
The issue of importing oil from Russia has gained great political and diplomatic importance over the past year.
Pakistan kept the exact price of Russian oil and its arrival secret and the payment was made in Chinese yuan.
The first shipment reached Karachi Port on the evening of June 11, carrying about 45,000 tonnes. The second ship, with about 56,000 tonnes of crude oil, had anchored at the Karachi Port on June 26.
According to experts, only if the prices of Brent crude oil and Arab Light Sea crude oil continue to rise while the price of Russian oil does not rise would the purchase of Russian oil be profitable to Pakistan.
However, analysts say that the possibilities of such a scenario are slim. They claimed that another option for resuming crude oil purchases from Russia was for Russia to create a special price reduction for Pakistan.
