Business & Economy

Pakistan says first shipment of Russian oil to arrive next month

Islamabad, May 24 (EFE).- First shipment of Russian oil is expected to arrive in Pakistan via Oman in early June as the south Asian country faces an economic distress with a balance of payment crisis, the authorities said Wednesday.

Pakistan placed its first order for discounted Russian crude oil under a deal struck between Islamabad and Moscow in April.

“The first cargo (of oil) from Russia will arrive in Oman on May 27 or 28,” Musadik Malik, minister for petroleum said in a statement on Wednesday, adding that the vessel, carrying 100,000 tons of Russian crude, will reach Pakistan during the first half of June.

“Russian oil will reach Pakistan by the end of the first week or the beginning of the second week of June through small ships,” he said.

According to Malik, a ship larger than 50,000 tons cannot be anchored at any port in Pakistan because of lack of facilities and the capacity of its ports.

Pakistan is importing crude oil from Russia to process in its local refineries. The minister hinted at setting up new refineries in coming years, while expecting an increasing demand for petroleum.

Pakistan plans to buy crude oil from Russia with imports expected to reach 100,000 barrels per day (bpd) if the first transaction goes through smoothly, the minister had said earlier.

The actual impact of the Russian oil on the local market will be determined once it reaches the market, he said.

The south Asian nation imported 154,000 bpd of oil in 2022 with Saudi Arabia being the largest oil exporter, followed by the United Arab Emirates, Kuwait, Malaysia, and Netherlands, according to data from analytics firm Kpler.

Oil import from Russia is expected to reduce the country’s dependency on the Middle East.

Currently, Pakistan is facing a crisis of balance of payments, depleting foreign exchange reserves, high inflation and depreciating local currency.

The foreign exchange reserves held by the central bank are barely enough to cover four weeks of controlled imports, mainly oil.

The country is still awaiting an agreement with the International Monetary Fund to resume a crucial $6.5 billion bailout program to avoid a potential default. Cash-starved Pakistan is expected to receive $1.1 billion of tranche if an agreement is signed. EFE


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