The Russian crude’s entry into the Pakistani market was seen as a major development to power the country’s economic wheel. However, the euphoria associated with the crude has subsided due to its low yield and high sulphur content which is damaging to the environment. Talking to WealthPK, Zahid Mir, CEO of Pakistan Refinery Limited, said Pakistan had  been looking for cost-effective and efficient sources of crude oil and turned to Russia as a potential supplier; however, the Russian crude produces less gasoline per barrel than other sources, which could hurt Pakistan's economy.” The Russian crude oil has a lower yield than the Arabian crude oil, he said, adding that the magnitude of this difference depends on the technology and facilities of each refinery.

"The Pakistan Refinery Limited chose to use the Urals blend of Russian crude oil because it was the most cost-effective option. Nevertheless, other factors beyond the crude oil's purchase price needed consideration. For instance, the shipping costs were higher for the Russian crude due to the longer distance it travelled. Moreover, the payment process involved intricate currency conversions, adding to the overall expenses,” he added. Mir also explained that the value of crude oil is determined by its inherent characteristics, such as density and sulphur content. Density is measured by the American Petroleum Institute gravity (API gravity), with higher values denoting lighter oil that is easier to refine into valuable products.

Sulphur content indicates the crude's environmental impact, with lower sulphur "sweet" crude being less harmful than the higher sulphur "sour" crude. The Russian crude has lower API gravity than other types of crudes, which means it is heavier and more difficult to refine. It also has a higher sulphur content, which makes it more harmful to the environment, he added. This puts the Pakistani government in a difficult position. If they continue to import the Russian crude, they will be getting a lower-quality product that is more expensive to refine. However, if they switch to alternative suppliers, they may have to pay more for the oil.

The government will need to carefully weigh the pros and cons of each option before deciding. The decisions they make will have a significant impact on Pakistan's energy security and its economic stability. Pakistan’s decision to import Russian crude has sparked a debate about its economic feasibility. The CEO of Pakistan Refinery Limited added that the decision to import the Russian crude was a "delicate balance" between the economic interests and environmental consciousness. The type of crude selected influences the refining efficiency, quality of end-products, and overall sustainability. As Pakistan navigates its energy landscape, it must carefully weigh the pros and cons of importing Russian crude oil. The allure of affordability must be evaluated against the hurdles posed by lower yields and complex logistics. The decision to import any form of crude necessitates a comprehensive understanding of refining processes, economic realities, and environmental ramifications.

Credit: Independent News Pakistan (INP)