US Oil Imports
KARACHI: Pakistan is exploring the possibility of importing crude oil from the United States for the first time as a strategy to address its growing trade imbalance, which has led to higher U.S. tariffs.
According to a government source involved in the proposal and an executive from the refinery sector, the country is considering U.S. oil imports as a way to mitigate the economic impact of these tariffs.
In the wake of President Donald Trump’s sweeping import duties, countries around the world are looking for ways to reduce their tariff burdens, with some opting to buy more oil and gas from the U.S. to alleviate trade deficits and ease the pressure from increased tariffs.
A government official, speaking on condition of anonymity, confirmed that the idea of purchasing U.S. crude oil is under serious consideration as part of a broader review of trade relations. “It is one of the products being reviewed ahead of a delegation leaving for the U.S. to talk about tariffs,” the source revealed. However, the final decision rests with Pakistan’s prime minister, who must approve the proposal.
Trump’s tariff policies, which include a 10% baseline tariff on all imports and even higher rates on specific products, have especially impacted countries with a trade surplus with the U.S. Pakistan, with a trade surplus of approximately $3 billion, faces a steep 29% tariff on its exports to the U.S.
While the trade imbalance has been temporarily paused due to Trump’s 90-day tariff moratorium, the matter remains unresolved, and Pakistan is seeking ways to mitigate the economic effects.
According to sources, Pakistan is contemplating importing an amount of U.S. crude oil equivalent to its current oil and refined product imports, which would amount to approximately $1 billion worth of crude.
Currently, Pakistan imports 137,000 barrels of oil per day, primarily from the Middle East, with Saudi Arabia and the UAE being its largest suppliers. In 2024, Pakistan’s oil imports totaled $5.1 billion.
In February, Saudi Arabia extended a $1.2 billion financing facility to Pakistan through the Saudi Fund for Development to support oil product imports, adding to the $6.7 billion it has provided since 2019. This new proposal to import oil from the U.S. is still in its early stages, and the final approval is awaited.
Several other major energy-importing countries, such as India, Japan, South Korea, and Taiwan, are also increasing their purchases from the U.S. to address trade surpluses, with India’s GAIL India Ltd recently tendering to buy a stake in a U.S. LNG project.
In summary, Pakistan is considering a shift in its oil sourcing strategy, contemplating U.S. crude imports as a means to ease the burden of tariffs, although the decision is still in the initial stages and requires further approval from the prime minister.
