WASHINGTON: Pakistan can be one of the beneficiaries of a US decision to “keep Russian oil available” in the market for lower and middle-income countries, a State Department spokesperson told Dawn on Monday.
The spokesperson said that this relaxation should not be seen as a move towards easing the sanctions the US has imposed on Russia for invading Ukraine in February this year, but he was quick to point out that “other countries will have to make their own choices based on their own circumstances in terms of energy imports”.
Earlier, it was reported that the US had allowed Pakistan to “cut a short-term cut rate deal for Russian crude oil”, but there was no clarity on the mechanism under which this could be achieved, nor was there any confirmation from the US government in this regard.
Speaking to Dawn on Monday, the State Department spokesperson recalled that while “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 was cognisant that all other countries could not afford to do so.
The spokesperson pointed out that while the US has barred energy imports from Russia, the American Treasury has issued general licences authorising transactions in energy with sanctioned entities to continue.
“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 explained.
The spokesperson also referred to the September 2 announcement by G7 countries on the Russian oil price cap which, they said, “is a major step forward in advancing these twin goals.”
The G7 move aims to prohibit the provision of services that enable maritime transportation of such oil products “unless purchased at or below a price level determined by the coalition of countries adhering to and implementing the price cap.”
The State Department official said the coalition was now “moving from exploring a price cap to implementing one, broadening our coalition.”
They pointed out that on September 9, the US treasury department had issued preliminary guidance on the ban on services related to the maritime transportation of Russian Federation-origin crude oil and petroleum products.
The guidance explained that a coalition of countries including the G7 and the EU and the United States will implement this policy which covers a broad range of services related to maritime transport.
The policy, constructed as a ban on services, has an important 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 is the 35th largest importer of crude petroleum in the world and in 2020-21, it imported $1.92B worth of crude oil. Buying cheaper oil from Russia will definitely ease pressure on the troubled Pakistani economy.
Published in Dawn, October 4th, 2022
