Pakistan May Buy Russian Oil With Chinese Yuan

beijingwalker · May 5, 2023

Pakistan May Buy Russian Oil With Chinese Yuan

By ProPK Staff | Published May 5, 2023 | 1:05 pm

The Government of Pakistan might pay for incoming Russian crude oil cargo in Chinese Yuan.

The cargo carrying 750,000 barrels of crude is expected to arrive by the end of May or the first week of June. “The price of crude will most likely be in Chinese Yuan, and the Bank of China may play a role in transactions,” reported TheNews.

According to other sources, Pakistan has finalized a per barrel price of around $50-52, compared to the G7 price cap on Russian oil of $60 per barrel. However, uncertainty prevails on the payment structure for the deal.

Authorities on both sides have so far refused to reveal the mode of payment and the exact discount, arguing that it is not in the best interests of the country, and the seller also does not want to make it public for fear of repercussions from other countries buying Russian oil directly from Moscow.

Pertinently, local refineries have imported 80 percent of crude under long-term agreements from ADNOC and Saudi Aramco, with a buffer to purchase Russian oil on a government-to-government basis (G2G)) on a long-term agreement to some extent.

However, Pakistan would prefer to keep some buffer for purchasing crude from the international market because crude prices can fall below the cost agreed upon in long-term contracts.