Pakistan is set to discuss a long-term oil deal with Russia next month, as it seeks to secure discounted oil supplies in the wake of rising global energy prices. The deal, which is expected to be finalized by the end of the year, would see Pakistan import up to 100,000 barrels of Russian oil per day.
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Benefits of the oil deal
The deal would be a boon for Pakistan’s economy, which has been struggling due to high energy costs. Pakistan imports over 80% of its oil, and the rising global oil prices have put a strain on its foreign reserves. A long-term deal with Russia would provide Pakistan with a reliable and affordable source of oil, helping to reduce its dependence on other oil-producing countries.
Challenges
However, the deal is not without its challenges. Pakistan has been facing pressure from the United States and other Western countries to reduce its economic ties with Russia. The US has imposed sanctions on Russia in response to its invasion of Ukraine, and it has warned other countries against doing business with Russia.
Another challenge is that Pakistan does not have the refining capacity to process Russian oil. As a result, it would need to export the oil to other countries for refining. This could add to the cost of the oil, and it could also make Pakistan more vulnerable to supply disruptions.
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Despite the challenges, the long-term oil deal with Russia would be a significant step forward for Pakistan. The deal would provide Pakistan with a reliable and affordable source of oil, helping to reduce its dependence on other oil-producing countries and boost its economy.