Pakistan State Oil (PSO) and a Russian technical delegation are holding talks in Karachi to give the final touches to a crude oil import deal. The talks were started yesterday and will continue today at government to government (GtG) level. Sharing the details, economist Abdul Rehman tweeted that a commercial agreement may be signed today if modalities are agreed upon.
“Russian crude is trading at $42-48 after a recent decline in oil prices,” he added.
PSO to hold talks with Russian 🇷🇺🇷🇺 delegation today and tomorrow in Karachi to finalise G2G crude oil import deal ✅✅
Commercial agreement may be signed tomorrow if modalities are agreed
Russian crude is trading at $42-48 after recent decline in oil prices‼️
— Abdul Rehman (@AbdulRehman0292) March 21, 2023
Talks for Russian Oil Continue
Meanwhile, an Energy Ministry official told the media that both sides will sign the commercial agreement today in case of successful talks. PSO is the nominated state-owned company on behalf of the Pakistan government, while Operational Service Center (PSC) is a state-owned company from Russia. Both companies have been given the authority to sign the deal.
The media report further mentioned that the Russian delegation reached Pakistan on Monday, and talks were held on March 21-22, 2023. It is pertinent to mention that the global price of Brent crude oil has come down to $73 per barrel; in comparison, the price of Russian crude oil stood at $52 in February, while its current price is revolving between $42-$48 in the international market.
The Russian side has emphasized that Pakistan refineries should purchase Russian oil independently in compliance with G7 countries’ regulations. However, Islamabad is trying to get hold of the deal on GtG basis below the price cap of $60 per barrel imposed by G7 countries in the wake of the Ukraine war. According to the sources, Pakistan’s petroleum divisions’ officials want to lock the deal around $50 per barrel, $10 per barrel below the cap price imposed by G7.
Russia will finalize all the prerequisites with PSO before inking a deal, including mode of payment, shipping cost with premium, and insurance cost. The sources have hinted that the Russian company could pay a discount on the base price.
As per the industry experts, the crude oil shipping from Russia will take 40 days, costing the per barrel $10-15.
What is your take on these talks for import of Russian oil? Please share your thoughts in the comments section.
