Why was crude oil imported from the US instead of the Gulf countries and will it be cheaper for Pakistan?

    

Why was crude oil imported from the US instead of the Gulf countries and will it be cheaper for Pakistan? 

 

 

     A ship carrying one million barrels of American crude oil docked at the oil terminal of a refinery in Hub district of Balochistan province in Pakistan on Wednesday afternoon.

The Pakistani refinery, which imports crude oil, claims that it has imported crude oil from the United States for the first time in decades.

According to the management of ‘Synergico Pakistan Refinery’, orders have already been sent to order more cargoes of crude oil from the United States. According to the refinery, after the arrival of the first cargo of one million barrels of crude oil, the next cargo of American crude oil will arrive in Pakistan in mid-November next month, while the third cargo will arrive in Pakistan in January 2026.

The Synergico Pakistan Refinery has called the import of American crude oil to Pakistan a significant development.

According to the refinery, the ship ‘MT Pegasus’, loaded with American crude oil, departed from the US state of Houston on September 14 and arrived in Pakistan on Wednesday afternoon.

 

Experts in the sector are seeing this development as a significant step towards diversifying Pakistan’s crude oil imports and ushering in a new era of bilateral relations between the US and Pakistan.

It should be noted that the US imposed a 19 percent tariff (i.e. tax) on Pakistani products in July this year, according to the US administration, with the aim of reducing the US trade deficit.

The 19 percent tariff imposed on Pakistan is relatively lower than the US tariffs imposed on other South Asian countries. Meanwhile, in July 2025, the US President announced an agreement to explore oil reserves in Pakistan, under which the two countries will work together to convert the vast potential oil reserves in Pakistan into recoverable reserves.

 

Although according to officials, no major progress has been made under the agreement related to the discovery of oil reserves in Pakistan, a cargo ship loaded with US crude oil has reached Pakistan in the meantime.

Pakistan meets its crude oil needs through imports from the Middle East. According to experts, the main reason for importing oil from the Middle East is that Pakistan is very close to the Middle East countries compared to other oil-exporting countries. Whereas, oil-importing countries like the United States are much further away from Pakistan than the Middle East.

In such a situation, the question arises as to why a Pakistani refinery needed to import one million barrels of crude oil from the United States? Will this oil be cheaper than crude oil imported from other countries (the Middle

 East) despite the long distance and high freight?    

There are different types of crude oil in the world, one of which is US WTI crude (crude oil). Apart from this, Brent crude, Arab Light crude, Dubai crude are well-known names whose prices vary slightly and their prices are used as a reference price.   

Pakistan meets its crude oil requirements from Middle Eastern countries, including the United Arab Emirates and Saudi Arabia.

Osama Qureshi, Vice Chairman of Synergico Refinery, which imports crude oil from the US, says, “We cannot say that Pakistan must buy oil from the US, however, efforts are being made to increase mutual trade between the two countries and the import of crude oil is also a part of these efforts.”     

He said, “We have a commercial refinery and we buy the crude oil that is better in our business model.”

Osama Qureshi said, “We view the import of American oil purely on a business basis. One cargo arrived on Wednesday while the second will arrive in November. Since it is not financially feasible to import crude oil from the US in the month of December, the cargo was not ordered in December, while the third cargo of American oil will arrive in January because its financial cost is suitable for us.”

He said that the refinery’s decision to import American crude oil was taken purely on business grounds.

Is American crude oil cheaper than oil from the Middle East?

gettyimages, Image source gettyima’

 

 

After crude oil from America reached Pakistan, many people were seen asking whether American oil would be expensive due to the greater distance from Middle Eastern countries because the shipping freight could be higher.

Regarding the price of crude oil imported from a distant country, Osama Qureshi said that American crude oil is slightly cheaper than other crude oils.

He said, ‘This crude oil is four to five dollars cheaper than Dubai crude per barrel. “The calculations we made, taking into account the prices in the months of October and November, showed that American oil is becoming cheaper than Middle Eastern crude oil in these months.”

Oil and gas sector expert Zahid Mir told the BBC that “it is true that American crude oil is slightly cheaper than Brent crude and Arab Light crude.”

He said that all refineries in the world generally order crude oil from their nearby countries so that it is cheaper for them in terms of rent. He said that Pakistani refineries import crude oil from the Middle East because they are clos      er

    

He further said that ‘one of the reasons why Synergeco Refinery is importing American oil is that a ship as big as one million barrels of crude oil can dock at their (Synergeco) oil terminal, while ships of up to five hundred thousand barrels can only dock at other ports in Pakistan.’

Zahid Mir said that ‘due to the handling terminal built for large ships, Synergeco has reduced freight costs despite the long distance, which makes it commercially viable for them to import oil from the US.’

Osama Qureshi said that Synergeco Refinery has its own ‘single point mooring’ terminal that can handle large ships, while other refineries do not have this facility.

He said that ‘the fare of a large ship is relatively low, due to which the cost per barrel is lower.’

Osama Qureshi said that ‘the gross refinery margin, that is, profit, has been seen on ordering American oil in October and November, so the refinery decided to import this oil.’

Due to the low domestic production of crude oil in Pakistan, a large amount of it is imported from foreign countries.

Zahid Mir said that Pakistan produces 15 to 20 percent of its crude oil locally, while the remaining requirement is met through foreign imports.

According to the Federal Bureau of Statistics, Pakistan imported about $5.5 billion worth of crude oil during the last fiscal year.

According to the organization, crude oil worth about $1.5 billion has been imported in the first quarter of the current fiscal year.

According to Pakistan Petroleum Information Services, local oil production in the country in the last fiscal year was 63,000 barrels per day, which is a decrease of 12 percent compared to the previous year.

Zahid Mir said that local refineries in Pakistan require 450,000 barrels of crude oil on a daily basis to produce oil products.

 

 

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