Russian oil option

Published
72

IN modern geopolitics, energy — specifically its supply, pricing and availability — can be and is weaponised by states and blocs to secure leverage. The Western decision to sanction Russian oil and gas after Moscow’s invasion of Ukraine is a case in point.

That is why states that are not major energy producers, like Pakistan, need to craft foolproof energy security policies that can shield them from major price shocks and supply disruptions if the world’s current geopolitical tussles mutate into uglier confrontations.

In this regard, the American offer to relax strictures on low- and middle-income countries that seek to import Russian energy is welcome. Talking to this paper recently, a State Department official said the waiver was being considered to keep Russian oil on the market in order to keep prices stable.

The fact is that Russian oil is available at steep discounts compared to the benchmark Brent crude. That is why India and China — one a strategic partner of the West, the other a major adversary — have been snapping up Russian oil in large volumes since the Ukraine war started earlier this year, ignoring Western calls to shun Russian petroleum products.

Read: The truth about Pakistan’s Russian oil deal prospects

Pakistan has not been able to cash in on this bonanza, though it could benefit from importing cheaper Russian crude, if technical and financial obstacles were cleared.

Moreover, when Prime Minister Shehbaz Sharif and President Vladimir Putin met at the SCO summit in Samarkand last month, the Russian leader offered to reactivate the Pakistan Stream gas pipeline.

Considering the energy crunch Pakistan faces, as well as the country’s precarious financial situation, where it can ill afford to pay high energy prices, the Russian option should be seriously explored, especially since our American friends have now declared that they have no problem with developing states buying Moscow’s hydrocarbons. In fact, taking advantage of the situation, Pakistan must also communicate to its Western partners that it should be free to purchase Iranian gas and oil to meet its energy demands.

Published in Dawn, October 9th, 2022

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