The US Agree to trade Russian Oil for Pakistan

The US Embassy in Islamabad has indicated that it is willing to meet with representatives of the Petroleum Division to discuss the process for negotiating a short-term discounted rate arrangement for Russian Oil.

(Infosette News) ISLAMABAD: According to knowledgeable diplomatic sources who spoke to Business Recorder, the US has shown a willingness to permit the trade of Russian Oil at a discount for a predetermined time.

In the case of Pakistan, the US Embassy in Islamabad has indicated a willingness to meet with the representatives of the Petroleum Division to explain the process for negotiating a temporary cut-rate arrangement for Russian crude oil.

Pakistan has already asked Russia for an agreement to buy oil and wheat at a reduced price.

According to reports, the US has communicated the new regime to its allies, particularly the coalition partners who depend on Russian energy, in a demarche.

According to the sources, the US Embassy informed the delegation about the prohibitions on services related to the maritime transit of Russian crude oil and petroleum products.

A coalition of the US, the G-7, and the EU will put into effect a policy to prohibit several marine services and transportation connected to crude oil and petroleum products of Russian origin (starting on December 5, 2022). (from February 5, 2023).

A jurisdiction may, however, buy seaborne Russian oil at or below a price cap, which is a significant exemption to this policy ban.


Demarche claims that the price cap’s two main objectives are to decrease the Kremlin’s income and I maintain the flow of Russian oil on the international market at cheaper prices.

In this perspective, emerging nations in Africa, Asia, and Latin America will be the primary beneficiaries of this cheaper oil.

The sources claimed that according to US policy, Russia has three options for maintaining the flow of its oil: selling under the price cap and finding alternate markets for its oil, which may not be a reliable option; (ii) refusing to sell; or (iii).

According to reports, Russia is already attempting to negotiate long-term discounts of 30% or more with nations because of their concerns over the price cap, the sources insisted.

According to insiders, the programme aims to promote oil commerce rather than discourage it, including Russian oil at reduced costs.

In this regard, importers and refineries must buy the seaborne Russian oil at a price at or below the established price ceiling in order to receive the essential services from any of the coalition countries’ members, such as insurance, brokering, bunkering, etc.

The United States and most of the G-7 nations have outlawed the import of Russian oil and will not purchase any of the oil that is made available by the price cap.

In order to monitor compliance, the US Treasury’s Office of Financial Asset Control (OFAC) will use a record-keeping and attestation approach to monitor whether oil transactions are below the price ceiling.

The marine and other pertinent departments of the importing firm will also receive advice from OFAC regarding red flags for sanctions and price cap evasions.

According to the sources, incentives for developing nations include: I reduced prices on Russian petroleum products and seaborne crude oil; and (ii) addressing inflation and lowering energy expenses in the respective nations.

The “price cap” has not yet been determined; it will be defined by global agreement among nations that consent to enact the services ban and price cap exception.

The sources added that the American side had indicated that a nation might cooperate with the coalition to set a price ceiling on Russian oil in order to reduce Russia’s income.

The United States has made clear that even if a nation decides not to join the coalition, it will still be able to take advantage of the coalition’s cheaper price for buying Russian seaborne oil.

According to sources, the Ministry of Foreign Affairs has also requested clarifications on this matter from the American Embassy in Islamabad.

The U.S. side did not appear to have any strict objections to a country entering into a long-term cut-rate deal to buy Russian oil before a price cap has been set, as asked by MoFA.

According to the sources, MOFA has asked the Ministry of Energy to arrange a meeting with representatives of the U.S. Embassy to discuss this matter.

MOFA has also asked for clarification regarding the possibility of a country entering into a long-term cut-rate contract to buy Russian oil before a price cap has been established.


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