$430m US crude deal struck

Pakistan has found an alternative oil supply route as a $430 million US crude deal by the private sector has helped reduce reliance on the Hormuz route and narrow the trade gap.

In a notable private sector development with broader economic implications, Cnergyico Pk has executed a commercial transaction for the import of six million barrels of US West Texas Intermediate (WTI) crude valuing at around $430 million. The deal, one of the largest private sector crude oil import arrangements between Pakistan and the US, reflects a gradual shift towards diversified energy sourcing at a time of heightened geopolitical and balance-of-payments pressures.

The transaction expands energy trade between Pakistan and the US while contributing to a reduction in trade deficit through market-based private investment. Importantly, the deal has been concluded without sovereign guarantees or government financing, limiting exposure for the public exchequer and aligning with broader efforts to reduce reliance on state-backed external funding.

Of the total volume, three million barrels have already been processed at Cnergyico's refining complex, indicating the capacity to handle varying international crude grades. The remaining three cargoes of one million barrels each are currently on their way, with one scheduled to arrive in February and two in March, which will ensure continuity of crude supply over the coming months.

Beyond its immediate commercial value, the transaction carries strategic significance for Pakistan's energy security. Increased sourcing from the US reduces dependence on traditional Middle Eastern suppliers and mitigates exposure to regional supply disruptions. In particular, it lessens reliance on the Strait of Hormuz – a narrow maritime corridor through which a substantial proportion of global oil trade passes and which remains vulnerable to geopolitical tensions.

A key enabler of this diversification is the Single Buoy Mooring (SBM) facility, the country's only deep-sea offshore crude oil handling system. The SBM allows the direct unloading of very large crude carriers (VLCCs) offshore, with crude transported to the refinery through an underwater pipeline network. This capability enables long-haul imports from sources such as the US and Africa, while reducing congestion at ports and lowering freight and demurrage costs.

Energy analysts view the SBM as a strategic national asset that enhances supply chain resilience, particularly during periods of regional instability or shipping disruptions. By allowing direct access to global crude markets, the facility increases flexibility in sourcing and provides an additional layer of energy security at a time when supply routes are increasingly exposed to geopolitical risks.

Commenting on the development, Usama Qureshi, Vice Chairman of Cnergyico Pk, said the transaction demonstrated the role private sector initiatives can play in supporting national economic objectives.

"Expanding crude imports from the United States helps reduce the trade deficit while also lowering dependence on traditional supply routes such as the Strait of Hormuz," he said. "Diversification of sourcing strengthens energy security and helps cushion the economy against external shocks."

He added that the initiative had been undertaken on a fully commercial basis, without government guarantees, easing pressure on public finances.

Alongside crude imports, Cnergyico has also increased its export facing activities. The company has exported Very Low Sulphur Fuel Oil and provided bunkering services to international shipping lines in collaboration with global energy major Vitol. These operations have generated foreign exchange inflows and expanded Pakistan's footprint in the international marine fuels market, particularly following the global shift towards cleaner shipping fuels.

As Pakistan continues to navigate economic constraints and external vulnerabilities, the private sector-led initiatives underscore the importance of diversified energy sourcing, resilient infrastructure and export-oriented activity. While the long-term impact will depend on sustained execution and broader policy alignment, the transaction highlights how commercial decisions can intersect with national economic and energy security considerations.