Russian Energy Minister Nikolai Shulginov has dismissed reports suggesting that Pakistan received any special discount on oil exports from Russia.
Confirming that oil exports to Pakistan have commenced, Russia clarified that Islamabad did not receive preferential treatment in the purchase agreement in an interview to the Voice of America (VOA).
Earlier last week, Prime Minister Shehbaz Sharif had announced the arrival and unloading of the first cargo of Russian discounted crude oil at the port in Karachi. Earlier, Petroleum Minister Musadik Malik had said that Pakistan had purchased 100,000 metric tonnes of Russian crude oil, with 45,000 tonnes already delivered this week. The payment was made in Chinese yuan, and Malik indicated that local oil prices would decrease in a few weeks. However, specific pricing details and the extent of the discount were not disclosed.
Russian media agency Interfax quoted the Russian energy minister stating that there was no special discount for Pakistan, as it was treated similarly to other buyers. Shulginov emphasised Pakistan’s significance as a partner, comparable to India, and mentioned that more deliveries would follow the recent shipment.
“Oil deliveries to Pakistan have begun. There is no special discount; for Pakistan, it is the same as for other buyers,” Russian state media quoted Shulginov as telling reporters on the sidelines of an international economic conference in St. Petersburg.
His remarks raised questions about official Pakistani assertions that Moscow had agreed to supply oil to Islamabad at a discounted price under a deal the two sides negotiated earlier this year.
Regarding payment in yuan, Shulginov stated that they agreed to use currencies of friendly countries. While the possibility of barter supplies was discussed, no decision has been made yet. Shulginov also clarified that Pakistan’s refineries determined whether to purchase oil or oil products based on their requirements.
“We agreed that the payment would be made in the currencies of friendly countries,” Shulginov said when asked for a response to Pakistani assertions that the trade is taking place in Chinese currency. He also confirmed that the issue of barter supplies was also discussed, “but no decision has been made yet.”
Regarding liquefied natural gas (LNG) exports, price negotiations are ongoing, with discussions focused on long-term contracts. However, current supplies are based on spot prices, which are currently high. “The discussion is about long-term contracts, but so far, we are talking about spot supplies, and spot gas prices are now high,” he said.
Local media reports had earlier mentioned that the test shipment aimed to evaluate the crude oil’s quality and refined product ratios for future decisions on long-term commercial oil deals. Pakistan had reportedly placed an order for the first Russian crude oil cargo at a discounted rate of up to $18 per barrel, following Platts crude oil prices with a discount of $16-18 per barrel.
Pakistan primarily meets approximately 80% of its oil requirements, around 154,000 barrels per day, through traditional suppliers from the Gulf and Arab countries, particularly Saudi Arabia and the United Arab Emirates.
After the end of the conflict, it would be in everyone’s best interest to start over economically.