Karachi, Pakistan– The first shipment of Russian oil to energy-starved and dollar-strapped Pakistan was due to be unloaded at Karachi port on Monday, Prime Minister Shehbaz Sharif said.
Since Russia launched its invasion of Ukraine last year, economic sanctions have seen a significant cut in its oil and gas exports to the European Union and United States.
However Pakistan, in the midst of an economic downturn worsening a long-running energy shortage, in May confirmed it had struck a deal with Moscow to buy petroleum products.
State Minister for Petroleum Musadik Malik previously said shipments will be paid for in currencies of “friendly countries”, with Pakistan’s US dollar reserves dangerously low and Russia pivoting away from the greenback.
“This is the first ever Russian oil cargo to Pakistan and the beginning of a new relationship between Pakistan and Russian Federation,” Sharif said on Twitter late Sunday.
Sharif, who is preparing for general elections later this year, said the first shipment of “discounted crude oil cargo” arrived in the southern city of Karachi on Sunday and was set to be unloaded on Monday.
Local media reported the cargo of 100,000 metric tons of oil left Russia a month ago and was split across two smaller ships in Oman before sailing to Karachi.
Pakistan — the world’s fifth most populous country — is currently on the brink of default with runaway inflation, the rupee tumbling and shrinking dollar reserves hobbling imports.
Meanwhile, negotiations to unlock the next tranche of a $6.5 billion loan package agreed with the International Monetary Fund have been stalled for months.
Islamabad imports 84 per cent of its petroleum products and has historically relied on friendly Gulf states for shipments.
Coal imports from Afghanistan have also likely doubled under the Taliban government, according to a 2022 report by research group XCEPT.
The energy sector has suffered shortages for years due to mismanagement, a lack of storage facilities and a poor economy.
The World Bank last week said this year’s outlook for Russia’s economy had improved, with stronger-than-expected energy exports to countries such as India and China offsetting sanctions.