On Tuesday, Nikkei Asia reported that its sources are saying that Pakistan wants to increase its crude oil purchases from Russia. Reportedly it is looking at possibly processing the additional crude through a refinery that is being planned which will be built with Saudi financing.
Last week a memorandum of understanding was signed by four leading Pakistani oil companies with Saudi Arabian oil company Aramco, which will result in the construction of a $10 billion integrated refinery-petrochemical complex with a refinery capable of processing a minimum of 300,000 barrels of crude oil per day, as well as a petrochemical facility.
The refinery deal was signed just shortly after Pakistan started importing Russian crude. In June, the nation took delivery of its first shipment, under a deal the two nations struck, which saw the cargo paid for in Chinese yuan.
According to Nikkei Asia, a Pakistani government official familiar with the developments said, “Pakistan plans to increase its oil imports from Russia, which would result in a need for additional refinery capacity in Pakistan. The proposed refinery in Gwadar will possibly help refine increasing volumes of Russian crude.”
Pakistan has joined India and China in scooping up discounted Russian crude, after Western sanctions prevented its sale to Europe and its allied nations. The Pakistani official noted that his nation’s decision to import crude from Russia has proven a success. Historically, Pakistan has primarily imported its crude from Saudi Arabia, and the United Arab Emirates.
On Monday, Reuters reported that some analysts and officials are doubtful that Pakistan will be able to meet its goal of seeing as much as two-thirds of its oil imports made up of Russian crude. The report said this would be due primarily to a mix of factors, including limitations at its refineries and ports, as well as a shortage of foreign currency to settle its trade agreements.