Pakistan plans Russian-Saudi oil ‘cocktail’

Islamabad targets imports of up to 100,000 bpd

WASHINGTON/SINGAPORE:

Pakistan is planning to blend newly purchased Russian crude with Arabian light crude in order to create a mixture that will be more easily processed by the nation’s oil refineries, Pakistan’s energy minister said on Tuesday.

The country is planning to purchase Russian crude oil at a discount as high prices caused by geopolitical tensions have caused fuel prices to more than double in Pakistan.

Russia’s heavier grades of crude oil are more difficult to process in Pakistan’s refineries, which are configured to process lighter Arabian crudes, Petroleum Minister Musadik Malik told Reuters in an interview in Washington.

Malik said he met with Biden administration officials and companies about energy transition technologies like hydrogen and solar power.

Under the deal with Russia, Pakistan will buy only crude oil, not refined fuels, with Islamabad targeting imports of up to 100,000 barrels per day (bpd) if the first transaction goes through smoothly. Malik declined to comment on the price of the deal.

Pakistan plans to blend “various recipes” of lighter Arabian crudes and Russian crude to create the “perfect cocktail” that could meet up to a quarter or a third of Pakistan’s refinery demand.

“It also depends on what discount we get and how much Urals or lighter crude is available in the market,” Malik said, adding that the country will also have to consider how the blend will change the yield of refined products that are sold at different prices.

Pakistan Refinery Limited will initially refine the Russian crude in a trial run.

Malik said the deal is centred on crude oil and not refined products because it was more difficult to get a discount on higher-priced diesel.

Published in The Express Tribune, May 11^th, 2023.

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