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

Pakistan is set to partner with Saudi Arabia, Kuwait, and Qatar in a planned oil storage scheme aimed at bolstering the country's energy security, according to Petroleum Minister Ali Pervaiz Malik. The minister announced the proposal during a press conference in Lahore, emphasizing the importance of enhancing domestic storage capacity for crude oil and refined products to mitigate the risks posed by supply disruptions caused by the US-Iran conflict that has led to tight supplies through the Strait of Hormuz.

The new bonded scheme, drafted with assistance from Aramco and other major companies, will allow the Gulf nations to store their oil reserves in secure Pakistani territories at their own expense, with Pakistan having the right to purchase these resources during a conflict to meet national needs. Malik stated that the Economic Coordination Committee has been directed to review the commercial bonded scheme, with a decision expected next week.

The minister highlighted that Pakistan currently imports around 90% of its energy requirements, with domestic oil production at approximately 70,000 barrels per day against a daily demand of around 500,000 barrels. To address this gap, the government is considering investments of $500 million for storing crude oil reserves for one month and $300-400 million for an underground storage system.

Malik reiterated the government's commitment to strengthening energy security and reducing reliance on imports through accelerated indigenous oil and gas exploration. Additionally, he announced that Turkish Petroleum would begin offshore drilling operations in Pakistan's territorial waters, attracting significant foreign investment in the energy sector.

The minister also assured the public that fuel supplies would remain uninterrupted despite economic pressures from the US-Iran war, with efforts being made to protect consumers from the full impact of rising global prices. The government has introduced a transparent petroleum pricing mechanism, with all calculations available on the Oil and Gas Regulatory Authority's website, and fuel prices have been revised nearly daily since mid-July to reflect market fluctuations.