Energy Breakthrough? Pakistan Weighs Iranian Oil Imports

Pakistan is once again exploring the possibility of importing discounted Iranian crude oil after years of restrictions, as a temporary easing of US sanctions has reopened discussions. Industry experts believe local refineries have the technical ability to process Iranian crude, but major commercial hurdles still stand in the way. One of the biggest concerns is the high furnace oil output, which has little demand in Pakistan’s power sector, making refining less profitable unless Iran offers significant price discounts. Analysts say any deal must remain competitive with Arab crude prices to be financially viable. Meanwhile, Pakistan’s refinery sector continues to modernise, with Pakistan Refinery Limited’s expansion project aiming to double its processing capacity, eliminate high-sulphur furnace oil, and produce cleaner Euro V fuels. Pakistan currently meets around 80% of its diesel demand through local refining, yet petroleum imports still cost the country nearly $17 billion in 2025. Experts estimate that if Pakistan imports just 10–20% of its petroleum needs from Iran at discounted rates, including freight savings, the country could reduce its import bill by $170–340 million. However, the final decision will depend on pricing, refinery readiness, government policy reforms, and evolving international sanctions.