A private company from Pakistan bought 100 thousand tons of Russian crude oil – media

Private Pakistani oil refiner Cnergyico has imported 100,000 tonnes of Russian Urals crude for processing at its plant in the southwestern city of Hub for the first time. This was reported by Reuters with reference to a representative of the company.

It has been noted that Pakistan has started buying crude oil from Russia due to its low prices and additional discounts given by Russian producers after banning its exports to the European market due to Russia’s invasion of Ukraine.

The first shipment of Russian oil, which arrived in Pakistan in June, was purchased by the government for the state-owned Pakistan Refinery, and negotiations are underway between the two governments for a second shipment.

According to the publication, the import of oil from Russia by Pakistani private enterprises is considered commercially unviable due to complex logistics, in particular, the lack of port capabilities. However, Cnergyico has its own berth, which can accommodate deep-draft tankers, and hopes to avoid logistical difficulties.

The company operates the largest oil refinery in Pakistan with a refining capacity of 156 thousand barrels per day (b/d), which is a third of the national capacity of 450 thousand b/d. Cnergyico plans to sell gasoline and diesel fuel produced from Urals oil domestically and export fuel oil.

The company assured that it has conducted due diligence and consultations with external sanctions advisors to ensure that Russian oil imports do not violate sanctions against Russia.

The publication states that this year Pakistan plans to import 100 thousand bpd from Russia, which will make up the bulk of its total imports and help overcome the currency crisis and contain record inflation. Last year, Pakistan’s total oil import reached 154 thousand bpd.

Cnergyico declined to comment on what currency it used to pay Russian suppliers.

The Pakistani government paid in Chinese yuan for the first import of Russian oil, and Cnergyico will also pay in yuan thanks to a letter of credit from a Chinese bank, the Reuters source said.

However, analysts said the benefits of Russian discounts are offset by higher shipping costs and the lower quality of fuel produced from Urals heavy sour crude oil compared to crude products from major suppliers of Pakistan, Saudi Arabia and the United Arab Emirates.

Let’s recall that in July Russia maintained the export of oil and petroleum products at the level of June – 7.3 million barrels per day, while its export earnings increased by $2.5 billion – to $15.3 billion.