A Russian delegation will meet with Pakistan State Oil (PSO) in Karachi today (Tuesday) to finalize a crude oil import deal at the government-to-government level (GtG).
PSO has been nominated to represent Pakistan in the negotiations and signing of the Russian crude oil import deal. The Russian side has nominated the Operational Services Center (PSC), which is a state-owned company, reported a national daily.
The Petroleum Division wants to lock in the deal at close to $50/barrel, $10/barrel less than the cap price imposed by G7 countries on Russian oil in the aftermath of the Ukraine war.
Meanwhile, Russia wants to confirm whether Pakistan truly wants to buy its crude. Regardless, before signing an agreement, Russians will finalize all prerequisites with PSO officials, including the mode of payment, shipping cost with premium, and insurance cost. During discussions with the PSO technical team, the Russian side may discuss discounts.
Sources said shipping crude oil from Russian ports would take 30 days, resulting in a per-barrel transportation cost of $10-15/barrel. For now, the government does not want to reveal the method of payment to Russia for crude oil imports but the Pakistan National Shipping Corporation ships or Russian tankers are currently being considered to transport crude from the Russian port.
Last week, Minister of State Musadik Malik stated that the crude deal with Russia was nearing completion and that the first shipping order would be issued next month. The minister also mentioned that the country will receive one-third of its crude oil imports from Russia at a concessional rate, the impact of which will be transferred to the people.
He added that the first crude oil vessel from Russia will arrive at the end of next month of April as a test cargo to assess the landed cost of crude as compared to the cargo Pakistan gets from ADNOC and Saudi Aramco.