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.
