The US has reiterated that it has no objection to Pakistan’s decision to import oil from Russia, saying that each country has the right to decide according to its needs.
Last week, Pakistan placed its first order for Russian crude oil under a deal signed between Islamabad and Moscow with a cargo at Karachi port in May.
Pakistan’s purchases give Russia a new outlet, adding to Moscow’s growing sales to India and China, as it redirects oil from western markets because of the Ukraine conflict.
At his weekly briefing, US State Department spokesman Vedant Patel said each country is going to make its own independent decisions about its energy supply.
“One of the reasons the United States has been a big supporter of price caps through the G7 is to make sure that there are not moves to keep Russian energy out of the market because we believe that supply The demand is there,” he said, stressing that steps needed to be taken to ensure that “Russian energy markets do not become a disaster for Putin’s war machine”.
The spokesperson said that countries will make their own independent decisions. “We have never tried to keep Russian energy out of the market,” he reiterated.
The Group of Seven (G7) alliance last week set a $60 per barrel cap on Russian crude, despite soaring global crude prices and calls from some countries for a lower price ceiling to limit Moscow’s revenue. decided to keep the barrel price ceiling.
The G7 and Australia decided to keep the cap in place over the past few weeks following a review of the $60 price – set in December last year – aimed at limiting Moscow’s ability to finance its war in Ukraine. Had to reduce.
The oil price ceiling bans G7 and EU companies from providing transportation, insurance and financing services for Russian oil and oil products if they are sold above the limit.
The United States and Great Britain have also imposed restrictions on the import of Russian oil.
Since Europe and the US no longer import crude oil from Russia, controlled purchases would only affect third countries, such as Pakistan. Islamabad has not yet signed the agreement, mainly because Pakistan does not import oil from Russia.
Details of Pakistan-Russia deal
Under the agreement signed by officials in Islamabad and Moscow, Pakistan will only buy crude oil, not refined fuel, Minister of State for Petroleum Mossadegh Malik told JEE News.
If the first transaction goes smoothly, imports are expected to reach 100,000 barrels per day (bpd), he said.
“Our orders are there, we have already placed them,” he said, confirming a source that said the country would not buy refined products.
A source in Moscow familiar with the negotiations told JEE News that a final deal was reached in recent days.
The Russian government did not respond to a request for comment.
Russian oil majors have discussed possible oil supplies to Pakistan in recent months, two trade sources familiar with the talks said, but declined to name the potential suppliers. A source said on condition of anonymity that Russia intends to supply Ural crude to Pakistan.
Data from analytics firm Kpler shows that Islamabad will import 154,000 bpd of oil in 2022, unchanged from last year.
Crude oil was mainly supplied by Saudi Arabia, the world’s largest exporter, followed by the United Arab Emirates. In theory, 100,000 bpd from Russia would greatly reduce Pakistan’s need for Middle Eastern fuel.
The U.S. dollar has historically been the currency of the oil trade, but the war in Ukraine has eroded its dominance as Russia avoids acquiring a currency it is largely barred from using by Western sanctions. .
Meanwhile, Pakistan’s economic crisis means it has a severe shortage of hard currency.
The country declined to say whether the Chinese yuan and the UAE dirham would be used for transactions. He also did not comment on the rate of imports.
“I will not reveal anything about the commercial aspect of the deal,” he said.
Malik said Pakistan Refinery Limited (PRL) will initially refine Russian crude in a trial run, followed by Pak-Arab Refinery Limited (PARCO) and other refineries.
