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HomeBusinessPakistan could profit from US "relaxation" on Russia oil

Pakistan could profit from US “relaxation” on Russia oil

Pakistan could possibly be one of the recipients of an US choice to “keep Russia oil available” in the marketplace for lower and middle-income countries according to a State Department spokesperson told Netmag on Monday.

The spokesperson stated that the move should not be interpreted as a step toward easing sanctions that the US has put on Russia for its invasion of Ukraine in February of this year. He quickly pointed out the fact that “other countries will have to make their own choices based on their own circumstances in terms of energy imports”.

In the past, there was a report that the US permitted Pakistan in order to “cut a short-term cut rate deal for Russian crude oil” however, there was no clear understanding of the procedure by which this would be accomplished or if there was any evidence by the US government on this issue.

Talking to Dawn on Monday In an interview with Dawn, the State Department spokesperson recalled that even though “the United States was able to ban oil, liquefied natural gas (LNG), and coal imports from Russia given our position as a strong energy producer”, Washington knew that other countries were unable to do this.

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The spokesperson also pointed out that even though the US has banned energy imports from Russia but they have also issued general licences. American Treasury has issued general licences that allow energy transactions with organizations that are sanctioned to carry on.

“A goal of our discussions with allies and partners is to keep Russian oil available on global markets to buyers in lower- and middle-income countries to help stabilise prices already trending at roughly double pre-pandemic levels, while working on ways to restrict Russian revenues from the sales,” the official said.

The spokesperson also mentioned the 2 September statement by the G7 nations on the Russian price cap on oil that according to them, “is a major step forward in advancing these twin goals.”

The G7 initiative aims to ban any services to permit the transport of maritime petroleum products “unless purchased at or below a price level determined by the coalition of countries adhering to and implementing the price cap.”

A State Department official said the group was “moving from exploring a price cap to implementing one, broadening our coalition.”

They noted they had announced on the 9th of September the US Treasury Department issued an initial guidance regarding the restriction on services that relate to transport by sea of Russian Federation-origin crude oil as well as petroleum products.

The document explained that a group of nations comprising the G7 as well as the EU as well as the United States will implement this policy that covers a wide variety of services that are related to shipping.

The policy, conceived as a prohibition on services but with a key one-off exception: “jurisdictions or actors that purchase seaborne Russian oil at or below a price cap to be established by the coalition will expressly be able to receive such services.”

Pakistan ranks 35th in the importation of petroleum crude around the globe and in the 2020-21 period it imports $1.92B dollars worth of oil. The purchase of less expensive oil from Russia will certainly ease the pressure on the ailing Pakistani economy.


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