Bargains lure Islamabad
Pakistan switches to Russian oil
01/20/2023 at 9:48 p.m
European countries are breaking away from Russia as customers for energy exports because of the sanctions. Pakistan, on the other hand, is turning to the Kremlin. High inflation means that Islamabad has to look for cheap oil, which Moscow currently has in stock.
In the future, Pakistan wants to cover a third of its energy requirements with Russian oil. This was announced by the Pakistani Energy Minister Musadik Malik. Deliveries of Russian oil at reduced prices could start as early as March, according to negotiations between Moscow and Islamabad. Malik did not provide any information on the price or the exact volume of the planned imports. To date, Pakistan has mainly obtained oil from the United Arab Emirates, Saudi Arabia and Kuwait, as well as liquefied natural gas from Qatar.
Irfan Schesad, an expert at the Eurasia Century Institute in Islamabad, spoke of a “win-win situation”. Gas shortages and high oil prices have recently massively boosted inflation in the country with around 230 million inhabitants. Prime Minister Shehbaz Sharif announced last year that he wanted to find new ways of meeting his country’s energy needs.
Moscow confirmed an agreement in principle for oil supplies to Pakistan. The technical details should be clarified by the end of March, said Russia’s Energy Minister Nikolai Shulginov. This applies to insurance, payment and transport issues. In addition, Shulginov suggested discussing the delivery of liquefied natural gas (LNG) to Pakistan from the end of 2023.
EU has been sanctioning Kremlin oil since December
In December, the EU imposed a price cap on Russian oil. The Western industrialized countries, which control a large part of the shipping companies, the financial market and ship insurance companies, have joined the regulation.
Since December, the EU has also imposed an import ban on Russian oil by sea because of the war of aggression against Ukraine. Germany and Poland are also forgoing oil from the “Druzhba” pipeline, which connects Russian oil fields with Eastern and Central Europe.