By Staff Reporter
KARACHI: Pakistan’s largest refiner, Cnergyico, will import 1 million barrels of US crude from Vitol in October, marking the country’s first such purchase after a trade deal with the US, its top export market.
The shipment, West Texas Intermediate light crude, will load in Houston this month and reach Karachi by late October, Cnergyico Vice Chairman Usama Qureshi said. “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, adding it’s not for resale.
Negotiations began in April when US President Donald Trump threatened a 29% tariff on Pakistani imports. Pakistan’s finance and petroleum ministries encouraged local refineries to explore US crude imports after the tariff threat emerged. A deal announced on Thursday sets a 19% tariff, hailed by Pakistan as investment-friendly.
Oil remains Pakistan’s biggest import item, with shipments valued at $11.3 billion in the fiscal year ended June 30, 2025, accounting for nearly a fifth of the country’s total import bill. Nearly all of its oil currently comes from Middle Eastern suppliers.
This import deal with Vitol offers Pakistan a chance to diversify its crude sourcing and reduce reliance on the Middle East. “Gross refining margin is on par with Gulf grades, and no blending or refinery tweaks are required,” Qureshi said.
Cnergyico, with a capacity to process 156,000 barrels of crude per day, operates Pakistan’s only single-point mooring terminal near Karachi, a facility that allows it to handle large tankers, a capability unique among the country’s refiners.
The company has ambitious plans to install a second offshore terminal to accommodate larger or more frequent shipments and to upgrade its refinery over the next five to six years. Despite its capacity, Cnergyico has been running at just 30% to 35% due to tepid local demand for oil products.
Still, Qureshi is optimistic about the future. “We expect run rates to rise as domestic demand strengthens and local production is prioritized over imported fuels,” he said.
The deal comes amid warming ties between Pakistan, a key ally of China, and the Trump administration. After tariff threats strained relations, Pakistan has credited US diplomatic efforts with de-escalating recent hostilities with neighboring India, even nominating Trump for the Nobel Peace Prize.
Separately, Trump said on Wednesday that the US would cooperate with Pakistan to develop its “massive oil reserves,” though he offered no further details. This first US crude import signals a potential shift in Pakistan’s energy strategy, with Cnergyico poised to lead the way if the test cargo proves successful.
Copyright © 2021 Independent Pakistan | All rights reserved
