Pakistan’s defence tech breakthrough: PM Shehbaz

Cnergyico, Pakistan’s largest oil refiner, has increased its purchases of US crude as the federal government works to diversify the country’s energy supply following disruptions tied to the war in Iran that exposed how heavily Pakistan depends on Gulf shipping routes. The government is also pushing to expand imports from the United States as part of a broader effort to narrow its trade surplus with Washington and secure relief from tariffs imposed by President Donald Trump. Cnergyico, which made its first purchase of US crude last year, is now weighing spot purchases alongside longer term supply contracts with Vitol and other suppliers, basing those decisions on pricing, reliability and supply security, Vice Chairman Usama Qureshi said. The refiner imported roughly 8.1 million barrels of US crude over a nine month stretch, including 7.1 million barrels worth about $750 million during the fiscal year that ended in June, according to Qureshi. Central bank data showed Pakistan’s payments for US imports climbed by $914 million to reach $3.27 billion during that fiscal year, meaning Cnergyico’s crude purchases accounted for roughly 80 percent of that overall increase. Qureshi said the refiner could expand its US crude purchases further if Pakistan’s proposed EXIM Bank trade finance facility gets extended to Cnergyico. Islamabad pitched that facility last month as a mechanism allowing Pakistani buyers to delay payments to US exporters for as long as three years. Pakistan has traditionally sourced most of its oil from Saudi Arabia and the United Arab Emirates, with roughly 90 percent of its oil and liquefied natural gas imports passing through the Strait of Hormuz before the war disrupted that route. Rising fuel costs have added pressure on Islamabad to respond, particularly as fresh protests over inflation and fuel prices broke out this week. The government has also pursued alternative supply routes, including Saudi crude delivered via the Yanbu port on Saudi Arabia’s Red Sea coast. Qureshi said Cnergyico is evaluating construction of a second offshore mooring facility linked to its existing storage network, which would allow the company to import and export refined products using large tankers outside Karachi’s congested ports. That project forms part of a broader $1.2 billion upgrade aimed at meeting Euro V fuel standards, reducing furnace oil output and expanding refining capacity to around 200,000 barrels per day. Fawad Basir, head of research at KTrade Securities, said the disruptions in the Middle East have underscored the risks of relying on a single supply corridor. He said using Very Large Crude Carriers to import US oil could reduce freight costs by 25 to 30 percent, while adding a second Single Point Mooring facility would speed up vessel turnaround times. Cnergyico currently processes 156,000 barrels of crude per day and operates Pakistan’s only single point mooring terminal near Karachi, giving it the unique ability among the country’s refiners to handle large tankers directly. The company plans to build a second offshore terminal to accommodate larger or more frequent shipments and intends to upgrade its refinery over the next five to six years. The refiner, which has been running at an average utilization rate of just 30 to 35 percent amid weak domestic demand, is betting that demand for refined oil products will strengthen in the years ahead.