Russian Oil: Pakistan Receives First Cargo, No Special Discounts, Says Russian Energy Minister
In a significant development, Russian Energy Minister Nikolai Shulginov has confirmed that Russia has commenced oil deliveries to Pakistan. However, he emphasized that there are no special discounts for Pakistan, clarifying that the country will be treated on par with other buyers. This statement comes amidst recent reports claiming exclusive discounts for Pakistan on the oil deal. The Voice of America (VoA) cited Russian state media for this update.
Currency Agreement and Barter Supplies Still Under Discussion
While addressing reporters at an international economic conference in St. Petersburg, Minister Shulginov also mentioned that they have agreed to accept Chinese currency as payment for the oil. However, he denied any claims regarding Pakistan receiving exclusive discounts. Moreover, the issue of barter supplies, although discussed, has not reached a final decision yet.
Pakistan’s Trade Expansion Efforts
Earlier this month, Pakistan issued a special order enabling barter trade with Afghanistan, Iran, and Russia for various commodities, including petroleum, LNG, coal, minerals, metals, wheat, pulses, and other food items. Minister Shulginov stated that discussions are ongoing to determine the prices for the export of liquefied natural gas (LNG) to Pakistan. The focus is on establishing long-term contracts, but presently, spot supplies are being considered, given the high spot gas prices.
Prime Minister’s Announcement and Payment Details
Prime Minister Shehbaz Sharif took to Twitter to announce the arrival of the first cargo of “Russian discounted crude oil” in Karachi. He expressed his optimism for a prosperous future and highlighted the beginning of a new relationship between Pakistan and the Russian Federation. Petroleum Minister Musadik Malik later disclosed that the payment for the oil had been made in Chinese yuan. While the deal’s commercial details, including pricing and discounts, remain undisclosed, Malik mentioned that local oil prices would see a reduction in the coming weeks.
Diversifying Oil Imports Amid Global Price Surge
Pakistan, which imports 70% of its crude oil, is actively seeking to diversify its sources of oil imports due to the surging global prices. Russia, being a major producer of crude oil, has offered discounted prices to Pakistan. To facilitate the payment, the Bank of China will process transactions in yuan.
Pakistan’s step toward expanding its energy resources with Russian oil imports marks a significant milestone, providing the country with opportunities for economic growth and energy security. As Pakistan navigates these new partnerships, it aims to ensure affordability and stability in its energy sector.
Published in PakWeb, June 17th, 2023.
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