Pakistan will be open to buying discounted Russian oil if no threat of US sanctions: Miftah Ismail

Published May 31, 2022
Finance Minister Miftah Ismail in an interview with CNN's Becky Anderson on Tuesday. ⁠— Becky Anderson Twitter
Finance Minister Miftah Ismail in an interview with CNN's Becky Anderson on Tuesday. ⁠— Becky Anderson Twitter

Finance Minister Miftah Ismail on Tuesday said Pakistan would be open to buying Russian oil at cheaper rates if it was offered and if no sanctions were to be levied over such a deal.

When questioned in an interview with CNN's Becky Anderson if Pakistan was open to procuring cheap Russian oil just as India was doing, the finance minister said he would "surely consider" it.

However, Ismail remarked that he did not think it was possible for Pakistani banks to make arrangements to buy Russian oil, also claiming that Moscow had not offered any such discounted deals to Pakistan anyway.

"The previous government talked about buying oil from Russia but I think Russia is under sanctions and they haven't responded to the letter written by the previous government," he told the CNN anchor.

Ismail said that with Russia being under sanctions, it was "very difficult" for him to imagine buying oil from there.

It is pertinent to mention that according to a Reuters report, current US sanctions against Russia do not prevent other countries from buying Russian oil, although Biden administration officials have considered secondary sanctions that could restrict those purchases in future.

PTI leader Shireen Mazari disagreed with Ismail's remarks, labelling him "ignorant" and saying: "There are no sanctions on purchasing oil from Russia. Ask India. So what's actually stopping him from buying other than fear of US."

Meanwhile, on the subject of imported wheat, Ismail, in the CNN interview, said Pakistan had asked both Ukraine and Russia and would be "happy to buy" from whichever country was ready to sell.

Pakistan's oil imports facing foreign exchange constraints

Pakistan's oil industry is facing challenges in arranging international finances for the import of crude and oil products.

Informed sources told Dawn that the Petroleum Division had told the prime minister and finance minister that arrangements for oil imports were getting tough by the day as foreign banks were not providing financing against letters of credit opened by oil marketing companies (OMCs) and refineries with the local banks.

A senior official told Dawn that except two large corporations — Pakistan State Oil and Pak-Arab Refinery Limited — all OMCs and refineries were struggling to arrange the import of petroleum products and crude.

Meanwhile, India has received 34 million barrels of discounted Russian oil since Moscow invaded Ukraine on Feb 24, according to Refinitiv Eikon data, more than trebling the value of total imports from Russia, including other products, compared with the same period of 2021.

India's oil imports from Russia have been rising since February, as Asia's third-largest economy and the world's third-biggest oil importer, turned to deeply discounted Russian oil, mostly Urals crude, to cut its imports bill.

The country received more than 24m barrels of Russian crude this month, up from 7.2m barrels in April and about 3m in March, and is set to receive about 28m barrels in June, according to Refinitiv Eikon oil flows.

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