Story By Jov Onsat |RigZone.com|Pakistan’s prime minister has said the country received its first-ever Russian oil cargo at a discounted price.
“Glad to announce that the first Russian discounted crude oil cargo has arrived in Karachi and will begin oil discharge tomorrow”, Shehbaz Sharif tweeted Sunday.
“Today is a transformative day. We are moving one step at a time toward prosperity, economic growth, and energy security & affordability”, he added, calling the development “the beginning of a new relationship between Pakistan and the Russian Federation”.
Pakistan’s petroleum minister told Reuters in April Islamabad and Moscow have signed a deal for the South Asian nation to import up to 100,000 barrels a day of Russian crude. The first delivery was to be made in May in Karachi city.
The imported petroleum would be refined in Pakistan, Musadik Malik was quoted as saying in a Reuters report on April 20.
Shift in Russian Oil Trade
The destination of Russian energy exports has shifted away from its traditional market Europe since the imposition of sanctions against President Vladimir Putin’s war on Ukraine.
“Clear signs of trade diversion emerged following the invasion, with the value of Russian fuel exports to the EU declining by over 40 percent last year, while exports to India and China increased”, the World Bank said in its outlook report for 2023 and 2024 published June 6.
The European Union received eight percent of Russia’s mineral fuels exports in December 2022, having consistently fallen since March 2022, when the region accounted for 17.4 percent of the total. The EU’s intake in March 2022, the month after Putin invaded Ukraine, was its highest in the January 2019-March 2023 data the United Nations lender presented in the report. The 27-member bloc comprised 2.2 percent of imports of mineral fuels from Russia in March 2023.
Meanwhile, the world’s number two economy China saw its share of imports of Russian mineral fuels hike to 8.2 percent in March this year from six percent in March 2022 and 5.8 percent in December 2021. India saw a steeper rise, accounting for five percent of Russian mineral fuels shipments in March 2023 from 0.9 percent in March 2022 and 0.6 percent in December 2021.
Russian Interest in Pakistan Energy Sector
Putin last year said Russia was looking to boost cooperation with Pakistan in trade and energy, particularly on gas.
The two countries signed an agreement in 2015 for the building of a gas pipeline between them. After five years of delays, the two sides inked a document in May 2021 to proceed with the construction “in the near future”, said a report by Russian state media TASS on October 17 about a planned meeting between the two nations to discuss the project.
“There are things we need to work on, and we see good prospects in several spheres, such as railway transportation and energy”, the Russian leader told Pakistani counterpart Sharif on the sidelines of a summit in Uzbekistan on September 15, according to a Kremlin transcript. “There are very interesting and large-scale projects, namely the Pakistan Stream gas pipeline project, which involves building the infrastructure needed for the delivery of LNG.
“The objective is to deliver pipeline gas from Russia to Pakistan. This is possible as well, in view of the fact that some infrastructure is already in place in Russia, Kazakhstan, and Uzbekistan”.
Sharif affirmed, according to the Russian presidential transcript, “We need to further build our relations in the field of energy, in the field of trade, in the field of investment and of course other strategic areas”.