Chinese Yuan may be used by the Pakistani government to pay for an inbound cargo of Russian crude oil.
By the end of May or the first week of June, the shipment carrying 750,000 barrels of crude is anticipated to arrive. According to TheNews, “the price of crude will probably be in Chinese Yuan, and the Bank of China may play a role in transactions.”
Other sources claim that Pakistan has settled on a price per barrel of $50–52, which is lower than the $60 per barrel G7 cap on the price of Russian oil. Regarding the deal’s payment structure, there is, however, uncertainty.
According to authorities on both sides, disclosing the method of payment and the precise discount is not in the national interest, and the seller likewise does not want to make it public out of concern for the consequences of other nations buying Russian oil straight from Moscow.
Relevantly, local refineries have imported 80% of their crude under long-term contracts from ADNOC and Saudi Aramco, with a buffer to partially purchase Russian oil under a long-term G2G deal.
Due to the possibility that crude prices could fall below the price specified in long-term contracts, Pakistan would wish to maintain a small buffer for buying petroleum from the international market.