The conflict in the Middle East has choked the global supplies of crude oil and Pakistan is beginning to face the heat. The country has already hiked thepetrol and diesel pricesby Rs 55/litre and also mullingCOVID-era-like curbs- opting for work-from-home options where possible and shifting classes online- to extend the supply of depleting energy reserves. The fuel crisis in the country has brought the spotlight on Pakistan's decision to shun Russian oil, citing "technical ground" as the reason. Notably, India has the option of relying on Russian supplies at a time when the Middle East supplies have been hit hard amid the ongoing war with Iran and its aftermath.

If the war rages for another few weeks, Pakistan may well rue the fact that it let go of an option that could have come very handy today. But was Pakistan's decision to shun Russian oil in 2022 only because of technical feasibility or more about balancing a diplomatic tightrope to keep the West (read America) happy and while also maintaining strong ties with its Arab partners? The debate now centres on whether the move was a calculated geopolitical decision or a costly economic misstep.

There are three main reasons why Pakistan does not import oil from Russia. Firstly, it's geopolitical compulsion that allows very little space for negotiations, unlike India, as it cannot antagonise its "masters" - the USA and the Arab counterparts - as Pakistan is always in need of a economic rescue from foreign bailouts (read IMF loans.) Simply put, Pakistan cannot risk upsetting Western powers for cheap Russian oil.

Secondly, Pakistan has built strong economic and strategic relationships with Gulf countries over several decades. Importing Russia’s Urals crude instead of traditional Arab blends could strain ties with energy partners such as Saudi Arabia and the United Arab Emirates.

The third issue is technical. Pakistan’s refineries are largely not designed to process Russian crude efficiently. Most local refineries rely on hydroskimming technology, which is not suitable for heavier and higher-sulphur crude such as Russia’s Urals blend.

Finally, Pakistan’s relatively small energy market makes it less attractive for Russia to offer the kind of deep discounts it has extended to larger buyers.

While Pakistan has stayed away from Russian crude, major Asian economies like India and China have taken advantage of discounted supplies.

Both countries significantly increased purchases of Russian oil after Western sanctions began in 2022. According to trade data analysed by Bloomberg, India bought more than 40 million barrels of Russian crude between late February and early May, representing flows about 20% higher than the entire year of 2021.

Shipping data from Kpler also showed Russian oil shipments to India rising sharply to 740,000 barrels per day in May (2022), up from 284,000 barrels in April and just 34,000 barrels a year earlier.

Cheaper Russian crude helped India reduce its dependence on costlier oil and provided fiscal space to manage domestic fuel prices. Government data showed oil imports from the Eurasian region, including Russia, rising to 10.6% in April from 3.3% a year earlier.

Source: India Latest News, Breaking News Today, Top News Headlines | Times Now