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6 May, 2023 15:19

Pakistan switching to yuan to buy Russian oil – media

The nations agreed a major oil deal earlier this year
Pakistan switching to yuan to buy Russian oil – media

Pakistan is likely to pay for shipments of crude oil from Russia in Chinese yuan, local media reported on Saturday, citing government sources. The first cargo of 750,000 barrels is expected to dock as soon as in June. 

An unnamed official from the Ministry of Energy told The News International that the transaction would be facilitated by the Bank of China.

The sources haven’t provided details about the mode of payment or the exact discount that Pakistan will receive, saying that making the information public is not in the interest of either buyer or seller.

“Russia will provide URAL crude in the test cargo and most probably Pakistan Refinery Limited (PRL) will be tasked to refine the Russian crude,” the official said.

Other sources told the media that Pakistan has agreed a per-barrel price of around $50-52, compared to the G7 price cap on Russian oil of $60 per barrel.

In December, the EU, G7, and their allies introduced a collective ban on Russian seaborne oil exports, along with a price cap of $60 per barrel. Another embargo banning almost all imports of Russian oil products, as well as introducing price caps on diesel and other petroleum products, kicked in on February 5.

In January, Moscow and Islamabad reached “conceptual” agreements on supplies of Russian oil and petroleum products to Pakistan. The deal is expected to provide relief to cash-strapped Pakistan, which is facing a balance of payments crisis and critically low foreign exchange reserves.

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