LAHORE , April 17, 2023: Pakistan and Russia have recently concluded the second round of talks over crude oil imports, moving one step forward in deciding the mode of payment, sources claim.
Sources further claimed Russian crude oil is expected to arrive in Pakistan in May if the order was successfully placed. The two sides held talks in Karachi on April 13-15, but no official statement was issued by any of the side.
The sources said Russian delegates advised the Pakistani to stay away from the media regarding discount in crude oil price and mode of payment deal. The top functionaries decided not to disclose the mode of payment and the exact discount.
Earlier, the technical teams of the Operational Services Center (PSC), a Russian state-owned entity, held talks for two days on March 21-22 with the Pakistan State Oil (PSO) team, which ended without progress on the constitution of Special Purpose Vehicle (SPV) responsible not only for importing the crude but also for the payments.
Commercial analysis has been worked out this time as to whether the import of crude from Russia would benefit Pakistan’s economy and to what extent. Since it was analysed that the import would be of benefit, Pakistan decided to go for the deal.
Sources said Russia during the latest talks asked for payment in China’s yuan or rouble, but Pakistan wanted to pay in Pak rupee. “The Russian ship will arrive in 26 days, most probably by the middle of May,” they added.
The current brent price in the international market stands at $85.16 per barrel whereas Russian oil is available at $47-48 per barrel.
Sources further said the State Bank of Pakistan (SBP) earlier asked some local banks, including the National Bank of Pakistan, to open letters of credit for importing Russian oil. Local banks have shown willingness, but with some hesitance mainly because of the G7 countries’ regulations following the price cap of $60 per barrel or below, and making the payments under the Society for Worldwide Interbank Financial Telecommunications (SWIFT) arrangement.