Video – First Ship Carrying Russian Oil Reaches Pakistan

The wait is finally over as the first ship or vessel carrying Russian Oil has reached Karachi, Pakistan. According to a Karachi port spokesperson, a 183-meter-long vessel with 45,142 metric tons of Russian Oil arrived at the port yesterday. You can see the video of that ship here:

Debates Around Russian Oil in Pakistan 

Russian Oil has been in the news for the last year or so in Pakistan. The former government of PTI made the first announcement regarding it when it wrote an official letter to Moscow requesting Oil at cheap rates. However, after the toppling of that government, the project was delayed for over a year. Then there was a debate over a couple of aspects regarding this Oil. First, it was debated whether Pakistani refineries could refine crude Oil from Russia or not, then it was about its price and whether it would bring the prices of fuel in the country down. 

Several experts and economists believed that the local refiners could not process this Oil. However, the doubt was cleared. Then the major discussion was about its impact on the local oil market and consumer relief. Earlier, it was said that Russian Oil would bring down the prices considerably, and the masses would be able to purchase fuel at a reasonable price. However, this was also rejected by State Minister for Petroleum Musadik Malik last month. 

Would it be Cheap?

In an energy conference, Mr. Malik concludes the whole episode with a single sentence stating that one cargo is not enough to lower the petrol prices in the country. He added that we may decrease the price after receiving multiple oil consignments from Russia.

To be fair, Mr. Malik miscalculated the mathematics of this hollow and baseless claim. Pakistan currently imports Oil from the Gulf region through Dubai, which is approximately 1,300 kilometers away from Karachi Port. On the other hand, the closest Russian seaport is situated around 8,000 kilometers away. As a result, this disparity in distances could potentially result in an extra cost of approximately $10-15 per barrel. 

Furthermore, in contrast to Saudi Arabia’s refined Oil, Russian crude Oil will pose a challenge to Pakistani refineries, as they are optimized to handle lighter Arabian crudes. Consequently, refining the heavier crude could lead to additional costs. According to specific media estimates, this could result in an extra expense of around $4 per barrel.

Additionally, Pakistan must address the issue of refining Russian crude and its impact on the country’s product portfolio. Russian crude Oil yields 50% furnace oil and 32% diesel, whereas Arabian Oil yields 45% diesel and 25% furnace oil. 

What are your expectations from Russian Oil? Please share your thoughts in the comments section. 

 

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