According to sources, the LC has been opened in the Chinese bank in an attempt to make payment for the cargo – the first-ever purchase of Russian oil by Pakistan – in Chinese yuan. Though the payment for Russian oil will be in yuan, it will put a burden on Pakistan’s foreign exchange reserves. Initially, Moscow offered the option of making payments in three currencies including the UAE dirham, Chinese yuan and Russian ruble. Pakistan, which follows the Platts price index, is hoping to get a discount of $16 to $18 per barrel on Russian crude oil. According to the source, the processing of Arab Light crude leads to production of 45% high-speed diesel (HSD) and 25% furnace oil while the Russian crude will produce 32% HSD and 50% furnace oil.

Source: The Express Tribune May 06, 2023 09:52 UTC