Amid the ongoing controversy surrounding the feasibility of Moscow’s crude oil for Islamabad, Pakistan Refinery Limited (PRL) refuted recent claims of suspending Russian crude oil imports due to processing issues. Zahid Mir, Chief Executive Officer (CEO) of PRL, clarified that the Russian crude was successfully processed and the spot deal remained technically and commercially feasible.
This development comes days after news reports suggested that the refining problems had led to the suspension of Russian crude oil imports. According to Geo News, Mir confirmed PRL’s intent to process Russian crude oil again under favorable commercial terms, indicating ongoing negotiations for another spot deal.
With a lot of fervor, the cash-strapped nation entered into a new trade partnership with Russia, acquiring discounted crude that has faced restrictions in European markets due to Russia’s conflict with Ukraine. The initial shipment arrived in June, with negotiations underway for a second delivery.
With aspirations to secure 100,000 bpd of Russian crude imports—a significant increase compared to the total 154,000 bpd of crude imported in 2022— Reuters report said that Pakistan aims to curtail its import expenses, counter foreign exchange issues, and deal with soaring inflation. However, the advantages of this arrangement are counterbalanced by escalated shipping expenses and the production of refined products of lower quality.
Pakistan energy sector sources informed The News International that the country suspended Russian crude oil imports after the refining process yielded more furnace oil than petrol. Reports stated that the Pakistan Refinery declined further Russian oil processing due to its lower petrol yield and higher furnace oil content, against Arabian crude oil.
According to Geo News, PRL temporarily halted Russian oil refining, despite former state minister for petroleum Musadik Malik’s insistence. Two Russian crude oil ships arrived at Karachi Port on June 11 and 26, with no further shipments to Pakistan since.
The Pakistan media reports stated that Russian oil imports carry great political and diplomatic significance. Pakistan keeps the price and arrival confidential while using Chinese yuan for transactions.
Experts believe the benefits of purchasing Russian oil might only materialise if prices of Brent crude oil and Arab Light Sea crude oil increase while the cost of Russian oil remains stable. However, such a scenario is deemed unlikely. Some suggest that a special price discount from Russia could lead to a resumption of crude oil imports, enhancing Pakistan’s energy landscape.