ISLAMABAD:
Amid tensions in the Gulf region, the government has planned to import oil through the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while switching to a weekly oil price review.
Sources told The Express Pakinomist that the government is currently working on various measures to ensure uninterrupted oil supply amid the Iran-US-Israel war.
Pakistan imports about one million barrels of oil on a monthly basis, with Saudi Arabia being a major oil exporter to the country. The UAE also exports oil to Pakistan.
Sources said UAE-based firm ADNOC and Saudi Aramco will supply oil to Pakistan by bypassing the Strait of Hormuz. One refinery has already imported a few shipments through the Red Sea. A few oil tankers have reached Pakistan while others are on their way.
As another measure, the government plans to move the oil price review from the existing 14-day system to a weekly basis. The aim is to counter dealers’ hoarding of oil products.
Sources said the government had anticipated a possible rise of Rs50 per liter in oil prices following the recent war in the Gulf region.
The US has pressured India to stop oil imports from Russia. After the war, India allegedly took oil cargoes from Russia in bulk to ensure fuel supplies through the Red Sea. Pakistan now also plans to receive supplies from Saudi Arabia and the UAE through the same route.
They added that oil tankers of the Pakistan National Shipping Corporation were put on standby to lift supplies from Saudi Arabia and the UAE.
The Oil and Gas Regulatory Authority (OGRA) has already secured high oil stocks to meet the country’s 28-day requirement after preemptive importation of excess fuel.
Due to the war between Iran and the US and Israel, two cargoes of crude oil were stranded after the closure of the Strait of Hormuz. The strait is 21 miles (33 kilometers) wide and serves as a vital shipping route through which nearly a fifth of the world’s total oil consumption passes.
Last year, an average of over 20 million barrels of crude oil, condensate and fuel were transported daily through the strait. OPEC members such as Saudi Arabia, Iran, UAE, Kuwait and Iraq use this route to export most of their crude oil, primarily to Asia.
“However, we have managed stocks of petrol and diesel sufficient to meet the country’s requirements,” sources told The Express Pakinomist, adding that Pakistan currently has 28 days of stock of both the products.
Officials said the regulator had already predicted in January that tensions in the Middle East could escalate into war between Iran, the US and Israel. “Therefore, we secured oil stocks for over 25 days in January and 28 days in February through the import of excess fuel.”
However, experts warned that the whole world could face an oil crisis if the war continues for a week. “Our two crude oil cargoes have been stuck due to the closure of the Strait of Hormuz,” a source said, adding that the remaining imports were planned for later.
The petroleum division had earlier directed OGRA to ensure adequate stocks of crude oil and petroleum products (MS, HSD and LPG) to avoid supply disruptions. Imports were also ordered to be closely monitored for timely delivery due to the new security situation in the Gulf.
