Pros and cons of importing US oil for Pakistan

Pakistan is considering importing crude oil from the United States to offset a trade imbalance that triggered higher US tariffs. However, many analysts question the economic viability of the proposal. Let us explore prose and cons of the proposal.

Pakistan imported 137,000 barrels per day of crude in 2024, mostly light grades from the Middle East, with Saudi Arabia and the United Arab Emirates among its top suppliers. Oil imports amounted over US$5 billion in 2024.

In February 2025, Saudi Arabia, through the Saudi Fund for Development (SFD), extended a US$1.2 billion financing facility to Pakistan for the import of oil products for a year. The SFD has provided approximately US$7 billion to Islamabad for oil products since 2019.

While the Government seems adamant at importing crude oil from the United States, experts have to find credible replies in favor of the move.

​Importing crude oil from the US could be a strategically viable option for Pakistan, but it involves several economic, logistical, and technical considerations.​

Potential Benefits

Reducing Trade Imbalance and Tariffs
Pakistan is exploring the import of US crude oil to address a US$3 billion trade surplus with the US, which has led to a 29% tariff on Pakistani exports. By purchasing approximately US$1 billion worth of US crude, Pakistan aims to mitigate these tariffs and improve trade relations.

Diversification of Energy Sources
Currently, Pakistan relies heavily on Middle Eastern countries for its crude oil imports, with Saudi Arabia and the UAE accounting for over 95% of its supply. Introducing US crude into the mix could enhance energy security by diversifying supply sources.

Challenges and Constraints

Refinery Compatibility
Pakistani refineries are primarily configured to process Middle Eastern light crude. While the exact compatibility with US crude grades varies, historical challenges with processing non-Middle Eastern crude, such as Russian oil, suggest potential technical limitations.

Higher Transportation Costs
Transporting crude oil from the United States involves longer distances as compared to Middle Eastern sources, leading to increased shipping costs and logistical complexities.

Dependence on Existing Financial Support
Saudi Arabia provides significant financial assistance to Pakistan for oil imports, shifting a portion of imports to the US might affect these favorable financing arrangements.

 Infrastructure Considerations

Pakistan's current oil import infrastructure includes ports like Karachi and specialized facilities such as Cnergyico's Single Point Mooring (SPM), capable of handling large crude carriers. While these facilities can accommodate increased imports, the overall capacity and efficiency of the supply chain would need assessment to handle US crude effectively.

Importing crude oil from the United States presents an opportunity to Pakistan to diversify its energy sources and address trade imbalances. However, it requires careful consideration of refinery capabilities, transportation logistics, and existing financial dependencies.