Energy Update: Pakistan’s Decision to Suspend Imports of Russian Crude Oil
Pakistan Suspends Russian Crude Oil Imports Due to Furnace Oil Imbalance
KARACHI: Pakistan has temporarily halted its import of crude oil from Russia as the refining process has resulted in an excess of furnace oil and a shortage of petrol, according to sources in the energy sector cited by The News on Sunday.
Sources also stated that Pakistan Refinery declined further processing of Russian oil due to its tendency to produce more furnace oil and less petrol, with a 20% difference in furnace oil yield compared to Arabian crude oil.
Additionally, the purported advantages of importing Russian crude oil were limited, with a larger proportion of furnace oil being generated for export at a lower price.
Certain insiders indicated that Russian oil also yielded a reduced quantity of kerosene and jet fuel for ships, making it less advantageous for the country.
Moreover, industry sources revealed that Pakistan Refinery has currently ceased the refining of Russian oil, despite the insistence of former state minister for petroleum, Musadik Malik.
After two crude oil shipments from Russia arrived at Karachi Port on June 11 and 26, there have been no further shipments of Russian oil to Pakistan.
Over the past year, the matter of importing oil from Russia has gained significant political and diplomatic significance.
Pakistan has kept the exact price and arrival details of Russian oil under wraps. The first shipment, carrying around 45,000 tonnes, reached Karachi Port on the evening of June 11. The second vessel, carrying approximately 56,000 tonnes of crude oil, docked at Karachi Port on June 26.
Experts have noted that for Pakistan to benefit from the purchase of Russian oil, the prices of Brent crude oil and Arab Light Sea crude oil would need to further increase while the cost of Russian oil remains stable. However, the likelihood of such a scenario is limited, according to these experts. They suggested that another possibility for resuming crude oil purchases from Russia would be for Russia to offer a special price discount tailored to Pakistan’s needs.
