Pakistan-Russia oil deal: Countries to make own sovereign decisions, says US

The United States has said that the recent oil deal between Pakistan and Russia is a “sovereign decision” as the US does not intend to pull Moscow “off the energy market”.

Responding to a question on a reaction to Pakistan’s oil purchase from Russia, US State Department spokesperson Vedant Patel said each country is going to make its own sovereign decisions as it relates to its energy supply.

“One of the reasons that the United States, through the G7, has been a big proponent of the price cap is to ensure that steps are not being taken to keep Russian energy off the market because we understand that there is a demand for supply,” said Patel in a news briefing on Tuesday.

“But we also need to take steps to ensure that Russians – Russian energy markets are not turning out to be a windfall for Putin’s war machine,” added Patel.

“And so, again, countries will make their own sovereign decisions. We have never tried to keep Russian energy off the market.”

The statement comes after Pakistan placed its first order for discounted Russian crude oil under a deal struck between Islamabad and Moscow with one cargo to dock at Karachi port in May.

The deal will see Pakistan buy crude oil only, not refined fuels, and imports are expected to reach 100,000 barrels per day if the first transaction goes through smoothly, Minister for Petroleum Musadik Malik was quoted as saying.

“Our orders are in, we have placed that already,” he said.

He said Pakistan Refinery Limited (PRL) will initially refine the Russian crude, with other refineries to be included later after a trial run.

Russian Energy Minister Nikolay Shulginov led a delegation to Islamabad in January to hold talks on the deal, after which he said oil exports to Pakistan could begin after March.

At the time, Shulginov also said Pakistan will pay for crude oil purchases in currencies of friendly countries.

“We have agreed that the payments will be made in the currencies of friendly countries,” he had said at a joint news conference with Pakistan’s Economic Affairs Minister Ayaz Sadiq back then.

He did not specify the ‘friendly countries’ and neither of the two ministers gave details on the size of the planned purchases.

Earlier, Malik had said that crude oil supply from Russia to Pakistan will start by the end of this month.

Last year, Pakistan sent officials to Russia, after Malik said Moscow would sell crude oil at a discounted rate.

Oil and energy make up the largest portion of Pakistan’s import bill and the country is struggling with a balance of payments crises due to dwindling foreign reserves.

Pakistan has traditionally relied on the Gulf for its energy needs, but the Russia-Ukraine war and high fuel cost along with Islamabad’s crippling financial situation prompted officials to look at Moscow in search for a cheaper alternative.