Pakistan to partner with Saudi Arabia, Kuwait, Qatar on oil storage scheme

Pakistan’s Petroleum Minister Ali Pervaiz Malik announced on Sunday that the nation is set to collaborate with Saudi Arabia, Kuwait, and Qatar on an oil storage initiative. The aim of the scheme is to bolster the country’s energy security following a surge in prices due to the conflict between the US and Iran, which has led to a blockade of the Strait of Hormuz and disrupted oil supplies.

Malik explained that Pakistan currently has no strategic petroleum reserves, leaving it vulnerable to oil shocks. Under the proposed plan, the three Gulf countries will store their oil on secure Pakistani territories at their own expense and then supply it worldwide from Pakistan. He emphasized that Pakistan would have the choice to purchase these resources during a conflict to meet its needs.

The commercial bonded agreement has been submitted to the Economic Coordination Committee under the direction of Prime Minister Shehbaz Sharif, with the minister confident that a decision will be made in the following week. Malik asserted that Pakistan's energy needs will be met "without spending money and despite a lack of resources."

The minister highlighted that the scheme would require approximately $500 million for storing crude oil reserves for a month and an additional $300-400 million for an underground storage system. He said the government would consider investing this amount in the coming months. Malik stressed the need to accelerate domestic oil and gas exploration to reduce reliance on imports, which currently account for around 90% of the country's energy requirements.

Pakistan produces about 70,000 barrels of oil per day, while its daily demand stands at around 500,000 barrels. Malik also announced that Turkiye’s Turkish Petroleum Company will soon start offshore drilling operations in Pakistan's waters, bringing potential foreign investment into the energy sector. Tenders for liquefied petroleum gas (LPG) will open on Monday, and the government has arranged to issue new gas connections to support consumers.

Despite economic pressures from the US-Iran war, Malik assured the public that the government had ensured uninterrupted fuel supplies and made every effort to protect consumers from the impact of rising global prices. The government introduced a transparent petroleum pricing mechanism, with all calculations available on the Oil and Gas Regulatory Authority's website since mid-July.