In a significant shift in its energy procurement strategy, Pakistan is set to receive its first shipment of American crude oil this October. Cnergyico, the country’s largest oil refiner, has finalized a deal with global energy trader Vitol to import one million barrels of West Texas Intermediate (WTI) crude—marking a notable diversification move away from Middle Eastern suppliers.
First American Oil Cargo En Route
The shipment will be loaded from Houston this month and is expected to dock in Karachi in the latter half of October, according to Usama Qureshi, Vice Chairman of Cnergyico. Speaking to Reuters, Qureshi described the shipment as a “test cargo” under a broader agreement with Vitol. If the economics prove favorable, he said, the company could move to importing US crude monthly.
“This cargo isn’t intended for resale. It’s a commercial trial. If it works, we’ll scale it up,” Qureshi said.
Pivot Prompted by US Tariff Pressures
This development follows months of quiet negotiations that began in April after a major policy shift by Washington. At the time, then-US President Donald Trump announced potential 29% tariffs on Pakistani imports, triggering a scramble in Islamabad to secure reciprocal trade openings.
By July, the two nations had struck a broader trade deal aimed at boosting investment and stabilizing relations. While the US ultimately imposed a 19% tariff, Pakistan saw an opening—particularly in the energy sector.
Encouraged by Pakistan’s finance and petroleum ministries, local refiners like Cnergyico were urged to explore American crude options to mitigate risks tied to Gulf-region supply chains.
Strategic Move Away from Middle East Dependency
Pakistan has long relied almost exclusively on oil from the Middle East. In the fiscal year ending June 30, 2025, the country imported $11.3 billion worth of crude—its largest single import expense, representing roughly 20% of its total imports.
Bringing in WTI offers not only diversification but operational simplicity. “Refining margins are competitive with Gulf oil grades, and no blending or infrastructure changes are needed to process the US crude,” Qureshi explained.
Cnergyico’s refinery has a daily capacity of 156,000 barrels and is the only one in Pakistan with a single-point mooring facility—an offshore setup near Karachi that allows it to handle larger tankers than its competitors.
To prepare for potentially increased imports, the company plans to build a second offshore terminal and gradually modernize its refining capacity over the next five to six years.
Domestic Demand Still Weak—For Now
Despite this strategic import, Cnergyico is currently running at just 30–35% capacity, reflecting ongoing weakness in domestic fuel demand. But the company expects an uptick in usage and plans to prioritize local production over imported fuels as the market rebounds.
“We’re looking at a recovery in demand, and that should push run rates higher,” Qureshi said.
US-Pakistan Energy Ties on the Rise
Interestingly, this crude oil deal isn’t the only headline in US-Pakistan energy relations. Trump—who remains a prominent political figure despite leaving office—recently floated the idea of US cooperation in developing Pakistan’s untapped oil reserves, though no concrete details have been shared.
Pakistan’s warming relationship with Washington, once icy under Trump’s earlier foreign policy, has notably thawed in recent months. Islamabad has even credited US diplomatic support for helping ease tensions with neighboring India, and in a dramatic gesture, nominated Trump for a Nobel Peace Prize.
As global energy dynamics shift and geopolitical alliances evolve, Pakistan’s oil strategy is no longer just about supply security—it’s also about diplomacy, investment, and long-term leverage.
