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Moscow supplies cheap oil to Pakistan


A price cap for Russian oil is intended to prevent the West from financing Putin's war of aggression. Now the government of Pakistan has announced supply contracts with Moscow – at “discounted prices”.

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Deep oil pump in Usinsk, Russia: price cap at 60 dollars

Photo: Dmitry Lovetsky / dpa

According to its own statements, Pakistan will in future buy oil from Russia on favorable terms.

This was announced by the Pakistani Ministry of Energy at a press conference in Islamabad.

Russia wants to deliver the oil at "discounted prices," said Pakistan's Minister of State for Oil, Musadik Malik.

Liquefied natural gas (LNG) is also planned to be purchased from Russia in the future.

The decision followed talks between the two countries in Moscow last week.

The delivery contracts are expected to be signed in January.

Bypassing the oil price brake?

A regulation has been in force since Monday that is intended to force Russia to sell oil to buyers in other countries for a maximum of USD 60 per barrel.

The price of around 57 euros per 159 liters would be up to 9 euros below the current market price.

The EU states and the largest industrial nations in the world had agreed on the price brake in order to put pressure on Russia in view of the war of aggression against Ukraine.

It is currently unclear whether deliveries to Pakistan will bypass this upper limit.

The Pakistani government did not provide information on the exact prices for the raw material.

Russia had already threatened in advance that it would not supply any oil to countries that would accept the price cap.

Skepticism in China and India

Pakistani Prime Minister Shehbaz Sharif recently announced that he would find new ways to meet his country's energy needs.

To date, Pakistan has mainly obtained oil from the United Arab Emirates, Saudi Arabia and Kuwait and liquefied natural gas from Qatar.

Gas shortages and high oil prices have massively boosted inflation in the country in the recent past.

Other countries have already expressed skepticism about the price cap, including China and India.

The Foreign Ministry in Beijing said it wanted to continue energy cooperation with Russia "on the basis of respect and mutual benefit," according to the Russian news agency RIA.


Source: spiegel

All business articles on 2022-12-05

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