4 weeks ago
Cnergyico Vice Chairman Usama Qureshi told news agency Reuters on Friday that the company will import one million barrels of West Texas Intermediate (WTI) light crude oil from Vitol. The cargo is scheduled to be loaded in Houston later this month and is expected to arrive in Karachi during the second half of October.
The deal follows several months of negotiations that began in April. (Photo: Reuters)
New Delhi,UPDATED: Aug 1, 2025 04:42 IST
Pakistan is set to receive its first shipment of crude oil from the United States after the country’s largest refiner, Cnergyico, finalised a deal with global energy trader Vitol.
Cnergyico Vice Chairman Usama Qureshi told news agency Reuters on Friday that the company will import one million barrels of West Texas Intermediate (WTI) light crude oil from Vitol. The cargo is scheduled to be loaded in Houston later this month and is expected to arrive in Karachi during the second half of October.
"This is a test spot cargo under our umbrella term agreement with Vitol. If it is commercially viable and available, we could import at least one cargo per month," Qureshi said as per Reuters. He clarified that the shipment was intended for domestic use only and not for resale.
MONTHS OF NEGOTIATION AFTER TARIFF THREATS
The deal follows several months of negotiations that began in April. Talks picked up momentum after US President Donald Trump threatened to impose a 29% tariff on imports from Pakistan. According to Qureshi, this prompted Pakistan’s finance and petroleum ministries to encourage local refineries to consider sourcing oil from the United States.
Islamabad described the pact as a breakthrough that would result in lower tariffs and greater US investment, although specific details about the tariff reductions were not disclosed.
Pakistan, traditionally a close ally of China, has shown signs of warming ties with Washington, particularly after President Trump intervened in de-escalating tensions between Pakistan and India. Pakistan even nominated Trump for the Nobel Peace Prize, acknowledging his diplomatic role in the region.
Oil remains Pakistan’s top import, accounting for nearly $11.3 billion in purchases in the fiscal year ending June 30, 2025. That represents close to 20% of the country’s total import bill.
With this new deal, Pakistan aims to reduce its dependency on Middle Eastern oil suppliers. "Gross refining margin is on par with Gulf grades, and no blending or refinery tweaks are required," Qureshi said, adding that the imported US crude suits their existing infrastructure.
Cnergyico currently processes up to 156,000 barrels of crude per day and operates Pakistan’s only single-point mooring terminal near Karachi. This gives the company an edge in handling large oil tankers, something other domestic refiners are not equipped to manage.
COMPANY PLANS UPGRADE TO MEET FUEL NEEDS
The company is also preparing for the future. According to Qureshi, Cnergyico plans to install a second offshore terminal to handle larger or more frequent shipments. Additionally, they aim to upgrade their refinery over the next five to six years to further increase capacity.
Despite running at just 30-35% of its refining capacity due to weak domestic demand, Cnergyico is optimistic. "We expect run rates to rise as domestic demand strengthens and local production is prioritised over imported fuels," Qureshi said.
In a separate development, Trump said on Wednesday that the United States has struck a new trade agreement with Pakistan to jointly develop the country’s vast oil reserves -- a move he says could eventually lead to Pakistan exporting oil to New Delhi.
- Ends
Published By:
Satyam Singh
Published On:
Aug 1, 2025
