WASHINGTON: The US State Department has said that Pakistan’s purchase of Russian oil at a discounted price proves the effectiveness of the US restrictions that have already deprived Moscow of about $100 billion in oil revenues.

On Wednesday, Pakistan’s US Ambassador Masood Khan told Dawn that the purchase would not create any misunderstanding between Pakistan and the United States as it’s within the US price cap.

“The arrival of Russian discounted crude oil cargo in Pakistan is a good development as it provides necessary relief to our economy,” Mr Khan said. “The consignment is within the price cap, and I don’t think it would create any misunderstanding with the US. The US has not objected to its allies and partners mitigating fuel shortages.”

On Monday, Petroleum Minister Musadik Malik told reporters that Pakistan paid for its first government-to-government import of crude oil from Russia in Chinese currency, indicating a significant shift in its US dollar-dominated export payments policy.

On Tuesday, both developments were discussed at a State Department news briefing in Washington where Spokesperson Mathew Miller rejected the suggestion that Islamabad’s decision to use Chinese currency for trade with Moscow was a sign of dollar’s weakness.

“One of the things notable about that is … that Russian oil was sold at a significant discount to market rates. And I think it’s a sign that the price cap the US, with its allies and partners, imposed … has driven down the price for Russian oil,” he said.

Published in Dawn, June 15th, 2023