Pakistan is turning to more U.S. crude as disruption around the Strait of Hormuz exposes the risks of its heavy reliance on Gulf energy supplies.
The move by the country’s largest refiner, Cnergyico, comes as Pakistan seeks to diversify its crude supplies after the Iran war disrupted regional shipping. Islamabad is also looking to boost imports from the U.S., narrow its trade imbalance with Washington and secure lower U.S. tariffs.
Cnergyico began importing U.S. crude last year and has brought in about 8.1 million barrels over nine months.
That includes 7.1 million barrels worth about $750 million during the fiscal year that ended in June.
Pakistan’s payments for U.S. imports rose by $914 million to $3.27 billion during that fiscal year, according to central bank data. Cnergyico’s purchases accounted for about 80 per cent of the increase.
The refiner is considering additional spot purchases alongside longer-term supplies from Vitol and other suppliers. U.S. crude imports could rise further if Cnergyico gains access to Islamabad’s proposed EXIM Bank trade finance facility, allowing Pakistani buyers to defer payments to U.S. exporters for up to three years.
Pakistan remains heavily dependent on Saudi Arabia and the United Arab Emirates for oil supplies.
Before the war, around 90 per cent of Pakistan’s oil and LNG imports passed through the Strait of Hormuz. That dependence has left the country vulnerable whenever tensions threaten the waterway, one of the world’s most important energy routes.
Pakistan has already sought alternatives. In March, it asked Saudi Arabia to route crude through Yanbu on the Red Sea, bypassing Hormuz. Saudi Arabia has since explored other routes as disruptions continued, including shipments through Yanbu and Egypt’s Sidi Kerir port.
The strategy, however, is not simply about replacing Gulf oil with U.S. crude. Pakistan is seeking both a wider range of suppliers and alternative shipping routes.
Cnergyico is also evaluating a second offshore single point mooring connected to its storage network. The facility would allow large tankers to handle crude and refined products offshore, reducing pressure on Karachi’s constrained ports.
The plan forms part of a $1.2 billion upgrade aimed at meeting Euro V standards, reducing furnace-oil production and expanding refining capacity from 156,000 barrels per day to around 200,000.
Using very large crude carriers to transport U.S. crude could reduce freight costs by 25-30 per cent, while a second offshore mooring could improve vessel turnaround times.
Cnergyico has been operating at an average refinery run rate of only 30-35 per cent amid weak domestic demand. Its expansion plans are therefore a bet that demand for petroleum products will strengthen in the future.
For Pakistan, the bigger issue goes beyond a single U.S. oil shipment. Disruption around Hormuz has exposed the risks of concentrating energy supplies along Gulf routes. Cnergyico’s turn towards U.S. crude, alongside alternative Saudi routes and new offshore infrastructure, shows how that vulnerability is starting to reshape the country’s oil strategy.
Nvidia, the world's most valuable chip company, is investigating its own boss, and China says the reasons behind it are false....
A large majority of Americans want the incoming Democratic-controlled U.S. Congress to end the war with Iran an...
Spain’s government has approved a package of rail safety measures after train drivers went on strike on Tuesday to demand more investment in ...
Delegations from Russia, Ukraine and the United States met in Abu Dhabi on Tuesday for their first formal talks in nine months. They did so with no agreement on what a ceasefire would be tied to or who gets to keep the land currently under Russian control.
At least 17 people have been reported killed in an explosion at a steel plant in western Türkiye, after a crane collapsed during maintenance work. The disaster has prompted a criminal investigation into what went wrong at the industrial facility.
Russia and Ukraine are set to return to Abu Dhabi on Tuesday for a fourth round of U.S.-brokered peace talks, with European participation, security guarantees and territorial disputes expected to shape the negotiations.
Nvidia has launched an independent investigation into whether its chief executive, Jensen Huang, was targeted in a foreign intelligence operation, following allegations that a businesswoman with whom he had a relationship passed information to Beijing.
U.S. envoy Jared Kushner said Washington believes the Russian President is prepared to reach a peace agreement under the right conditions, as U.S., Russian and Ukrainian delegations began trilateral talks in Abu Dhabi on Tuesday 10 November.
Nvidia, the world's most valuable chip company, is investigating its own boss, and China says the reasons behind it are false.
A large majority of Americans want the incoming Democratic-controlled U.S. Congress to end the war with Iran and repeal President Donald Trump’s tariffs, a new Reuters/Ipsos poll shows, pointing to strong pressure for quick action on the cost of living.
Spain’s government has approved a package of rail safety measures after train drivers went on strike on Tuesday to demand more investment in maintenance, following the country’s second deadly rail crash this year.
Russia has declared a Moldovan diplomat at the country’s embassy in Moscow undesirable, in retaliation for a similar move by Moldova last month, the Russian Foreign Ministry said on Tuesday (10 November).
A senior U.S. Army soldier has been arrested in Britain on suspicion of assisting Russian intelligence, British police said on Tuesday (10 November), a day after the United States moved aircraft out of a British air base over an apparent threat from Iran.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment