Pakistan mulls resuming Russian crude oil imports during upcoming PM's visit to Moscow

Pakistan is considering resuming imports of Russian crude oil, a move that will be explored during Prime Minister Shehbaz Sharif’s upcoming visit to Moscow next month. The possibility of renewing these imports was discussed in recent high-level meetings between the Petroleum Division and oil sector representatives, The News reported. 

In 2023, Pakistan imported 200,000 metric tonnes of Urals crude from Russia, with two refineries involved in the transaction. However, the imports were halted due to financial unviability and rising anti-Russian oil sentiments following the Russia-Ukraine conflict.

Petroleum Minister Ali Pervaiz Malik chaired a meeting earlier this week, gathering input from refineries and other stakeholders on the feasibility of resuming Russian crude imports. Industry officials were informed that energy cooperation, including potential crude imports from Russia, will be a key topic during the prime minister's visit to Russia in March.

The government has requested proposals from the oil sector covering commercial arrangements, logistics, and financing for any potential imports. 

However, officials within the industry have raised concerns, citing the lack of a workable mechanism to open letters of credit (LCs) for these transactions. "No bank is willing to open an LC for this import," one participant said.

Moreover, oil sector representatives questioned the timing of the initiative, pointing out that even countries like India have reduced their Russian crude imports due to increasing pressure from the United States. Geopolitical conditions, they argued, make it unlikely that Pakistan would secure reliable and sustainable supplies from Russia.

In addition, local refineries have expressed concerns about the commercial viability of Russian crude, noting that it produces a higher proportion of furnace oil and requires blending with Middle Eastern grades to optimize the output of diesel and petrol.