On Wednesday, Pakistani petroleum minister Musadik Malik announced that as it sought to secure more economical sources of energy due to the present macroeconomic conditions, Pakistan has placed its first ever order for Russian crude oil.

In an interview with Reuters, the minister said that his country had secured a deal with Russia to purchase crude oil at a discount, in amounts expected to rise to 100,000 barrels per day once the first transaction completes without a hitch.

The deal will see Pakistan import two grades of crude, Sokol grade, and Russia’s flagship Ural blend. Although the contract did not include refined products, the crude will be refined in Pakistan, reportedly with the assistance of Russian industry experts. According to Malik, the first shipments are expected to arrive in mid-May, to a Karachi port.

Confirming the deal, Malik told Reuters, “Our orders are in, we have placed that already.”

He added that during this trial run, the products would be delivered to Pakistan’s Refinery Limited (PRL) to be processed, however later shipments will be delivered to a range of refineries for processing.

The fifth most populous nation in the world, Pakistan has been suffering from an energy shortage, which has only grown worse as global energy prices have surged. As the the nations of the EU have been denied Russian energy products due to sanctions, embargos and other events, their demand for replacements for the Russian products has taxed the remaining market, making fuel five to ten times more expensive to import into Pakistan.

In 2022, Pakistan imported 154,000 barrels of crude oil per day, primarily from the United Arab Emirates and Saudi Arabia. However that appears set to change now, as Karachi will shift its purchases from the Middle East to Russia, sourcing as much as 33% of its crude demand from the Kremlin.

Analysts note that Pakistan had been in a precarious financial position, with critically low foreign reserves, a balance of payments crisis, and global energy prices surging. With official data showing that the bulk of the nation’s external payments are being made for energy imports, discounted Russian crude will offer the country considerable relief from its financial straits.

Reportedly, Moscow has transitioned away from the dollar, and now settles transactions primarily rubles and yuan. Malik however refused to disclose how Moscow and Islamabad intended to settle the transaction, explaining he was not allowed to discuss the commercial side of the transaction.