Pakistan will receive its first-ever shipment of US crude oil later this year, marking a major shift in the country’s energy imports. The move comes after US President Donald Trump finalized a trade deal with Pakistan, which also includes plans to help the country develop its “massive oil reserves.”
Key Details of the Oil Deal
- Cnergyico, Pakistan’s largest refinery, has signed an agreement with Vitol to import 1 million barrels of US crude oil, according to Vice Chairman Usama Qureshi.
- The shipment of West Texas Intermediate (WTI) light crude will depart from Houston this month and is expected to arrive at Karachi Port in late October 2025.
- This shipment is a test cargo under a long-term supply agreement. If the trial proves successful, Pakistan may import at least one shipment per month.
Why This Deal Matters for Pakistan
- Diversification of oil sources: Pakistan currently relies almost entirely on Middle Eastern oil suppliers.
- Reduced import dependency: Access to US crude will strengthen energy security and lower reliance on single-source imports.
- Economic significance: Oil is Pakistan’s largest import, valued at $11.3 billion in FY 2024-25, nearly 20% of total imports.
Refinery and Infrastructure Plans
- Cnergyico operates at 30-35% capacity due to weak local demand but expects increased consumption in coming months.
- The refinery can process 156,000 barrels per day and hosts Pakistan’s only single-point mooring terminal, which allows it to handle large tankers.
- Plans include building a second offshore terminal and upgrading facilities over the next five to six years.
Tariff Relief and Trade Shift
- The US has reduced tariffs on Pakistani exports to 19%, effective August 7, 2025.
- The decision follows Trump’s earlier 29% tariff threat and comes as Pakistan adopts a more cooperative trade stance.
- Trump has reiterated US support to help Pakistan develop its untapped oil reserves, though details remain undisclosed.
This deal marks a strategic milestone for Pakistan’s energy diversification and reflects deepening trade ties with the US amidst shifting global oil dynamics.
