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Tuesday, July 23, 2024

Pakistan buys Russian oil with Chinese currency in landmark deal

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Pakistan has paid for its first import of Russian crude oil in Chinese currency, the country’s petroleum minister said on Monday, marking a significant shift in its U.S. dollar-dominated trade policy. The deal comes as Pakistan faces a severe balance of payments crisis and seeks to diversify its energy sources.

The first shipment of 100,000 tonnes of discounted Russian crude oil arrived in Karachi on Sunday under a government-to-government (G2G) deal signed between Islamabad and Moscow earlier this year. The purchase was made in April and consisted of two cargoes, of which one has docked at Karachi port and the other is on its way.

Petroleum Minister said that the payment was made in Chinese currency, but did not disclose the commercial details of the deal, including the pricing or the discount that Pakistan received. He said the purchase was a trial run to assess the financial and technical feasibility of importing Russian crude on a long-term basis.

The deal is seen as a strategic move by Pakistan to strengthen its ties with Russia and China, two of its key allies and rivals of the United States. It also gives Moscow a new outlet to sell its oil to Asia, as it faces sanctions and pressure from the West over the Ukraine conflict.

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