Pakistan, Russia in Talks for Major Oil Sector Agreement

Pakistan and Russia are actively negotiating a potential oil sector agreement, signaling a major step forward in bilateral energy cooperation. Finance Minister Muhammad Aurangzeb has confirmed that talks between the energy ministries of both countries are underway, focusing on oil exploration, production, refining and broader industrial collaboration.

Speaking to Russia’s RIA news agency, Finance Minister Muhammad Aurangzeb said Pakistan is keen to benefit from Russia’s expertise in the oil sector. He described oil exploration, production and refining as Russia’s core strengths and expressed Islamabad’s strong interest in formalizing cooperation.

“We would be very happy if Russia agreed on an agreement in this sector with Pakistan,” Aurangzeb said.

The discussions come at a time when both countries are adjusting to changing global energy dynamics. Russia is actively seeking new markets amid Western sanctions linked to the Ukraine conflict, while Pakistan is working to ease pressure on its economy by reducing a high fuel import bill and diversifying energy suppliers.

Refinery Upgrade and Industrial Cooperation

Beyond crude oil trade, Russia has also held talks on upgrading an existing refinery in Pakistan. Russian Energy Minister Sergei Tsivilev had earlier confirmed that Russian companies are involved in these discussions. In addition, Pakistan and Russia are examining the possibility of setting up another steel plant in Pakistan, expanding cooperation beyond the energy sector into heavy industry.

Russian Crude Imports to Pakistan

Pakistan began importing Russian crude oil in 2023 under a government-to-government arrangement. The first shipment of 45,000 tonnes arrived at Karachi port in June 2023 after months of negotiations, followed by a second cargo of 55,000 tonnes later that month. Some delays were reported due to limited storage capacity at Pakistan Refinery Limited, highlighting the need for infrastructure upgrades.

If finalized, a Pakistan-Russia oil sector agreement could strengthen energy security, reduce import costs and open the door for long-term industrial collaboration, marking a significant shift in Pakistan’s regional energy strategy.