Pakistan wants top-quality Russian crude at a price not more than the Group of Seven (G7) nations’ $60 per barrel limit.
After test-processing the first shipment of 100,000 tons of URAL crude by Pakistan Refinery Limited (PRL), the government wants to import the Russian fuel but at a rate ~$35 lower than today’s international rate of roughly $95 per barrel, local media reported earlier today.
Pakistan has already requested Russia to supply high-quality crudes such as SOKOL or Siberian Light Oil which are more expensive than URAL, but Moscow is unlikely to deliver the top crudes at a massive discount of $35 per barrel.
During the pilot phase, PRL produced 10 percent petrol, 60 percent furnace oil, and 10-15 percent diesel from URAL crude, with the remaining 15 percent going to other goods. However, due to a stock surplus, the refinery was forced to export furnace oil at a 25 percent loss.
It has been determined that the furnace oil produced by URAL has a high viscosity and must be mixed with 10 percent diesel so that it can flow. This is how furnace oil production increases to 60 percent with URAL processing while diesel production decreases by 10 percent. Resultantly, net diesel output is at 10-15 percent, meaning that out of 100,000 tons of low-grade Russian crude, PRL must export 60 percent of it as furnace oil at a loss. Due to this issue, the government seeks better-quality Russian crudes but at a below-market rate.
Notably, Brent crude remains in the $93-96 per barrel level and may hit $100 due to OPEC+ production cuts. Regardless, the feeling on the Pakistani side is that the country should receive one cargo of Russian crude per month at discounted rates.