ISLAMABAD: Pakistan is likely to face more difficulties in the near future as tensions rise in the Middle East, raising fears of an oil shortage in the country.
Pakistan imports a large portion of its oil from Saudi Arabia. The Strait of Hormuz is already closed, and Pakistan’s alternative route via the Red Sea has now been seized by Houthi rebels.
In August, the government had arranged three oil tankers which were stopped by the Houthis; however, after intervention by the Pakistani establishment through contacts with Iran, the Houthis later released them.
The government will now need more dollars to pay higher prices for oil in the future. The government is considering crude oil sources beyond the Gulf. According to sources, the government is considering supply from Oman and Fujairah and is reviewing options from Libya, the USA, West Africa, and Kazakhstan.
Since Pakistani ports do not have the required depth to anchor very large crude carriers (VLCCs), officials plan to anchor VLCCs coming from the USA near Sohar in Oman or near the coast of Hub and transfer the cargo from ship to ship (STS).
Cnergyico is the only refinery that can anchor a double-size vessel at its SPM. Despite all challenges, Pakistan has kept its petroleum supply chain active.
However, officials and industry have warned that acquiring oil vessels for November will be much harder and more expensive. Even after the Strait of Hormuz was closed, Pakistan was being supplied oil from Saudi Arabia’s East-West Pipeline.
This month, this pipeline has also been closed due to drone attacks. Petroleum Minister Ali Pervaiz Malik said Saudi supply is currently closed and a Pakistani vessel has been kept on standby.
The Petroleum Division says the country has more than 20 days of stock. According to officials, planning for November oil supply is underway. In the last two months, petrol prices in Pakistan have increased by about Rs 68 per liter and diesel by Rs 57 per liter. Industry officials said freight and war risk insurance premiums have increased three to four times. Despite this, Pakistani consumers are paying less for diesel compared to motorcyclists or car drivers in the US.
Industry sources said the prices being quoted for November vessels are significantly higher. However, the Petroleum Minister is hopeful that alternative arrangements will keep the country’s supply chain uninterrupted.
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